Monday, May 14, 2012

SATS expects to benefit from increase in passengers this year

SINGAPORE: SATS Limited, the airport services company, expects to benefit from an increase in passengers passing through Changi this year.

In a statement accompanying its fourth quarter results, SATS said the increase will come from growing regional passenger traffic and "certain airlines expanding their networks."

SATS reported a 1.2 per cent drop in net profit for the fourth quarter ended 31 March 2012 compared to a year earlier, to S$50.1 million.

Its shares in Singapore rallied after the result beat some estimates. The stock closed Monday 2.3 per cent higher at S$2.61.

The company attributed the fall in earnings to the absence of a gain from the disposal in October 2011 of UK unit, Daniels, which boosted fourth quarter earnings in FY11.

SATS said a better performance from gateway services and food solutions lifted operating revenue in the latest quarter by 7.8 per cent on-year to S$433 million.

"Both businesses benefited from increased flights and higher passenger traffic at Singapore Changi Airport as well as improved performance by overseas subsidiaries, SATS HK and TFK," the company said.

Operating expenses increased 7.5 per cent to S$385 million.

However, SATS forecast continued weakness in demand for cargo handling services, "especially for the next two quarters."

It said cargo throughput in Singapore dropped 2.4 per cent in the fourth quarter from the same period a year earlier, due to "soft consumer demand especially for electronics and manufactured goods in key markets such as Europe and Americas."

SATS' operations abroad are also affected.

"Weaker general cargo demand and a stronger Singapore dollar are expected to continue to affect the performance of some overseas associates and joint ventures," SATS' statement said.

View the original article here

Source Form Channel News Asia

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