SATS - Cost Pressures While Awaiting Travel Return
- SATS (SGX:S58)'s 3QFY22 (Oct 2021 to Dec 2021) net profit of S$5.1m was in line with our estimate but below consensus due to an exceptional ~S$10m in bad debt provision. Without the one-off provision, SATS maintained a stable q-o-q operating profit breakeven level.
- Staff cost pressures mitigated by recovery in associates’ contribution but cost impact likely to creep up in the near term before recovery in sales.
- Reiterate HOLD call on SATS with revised DCF-based target price of S$4.34. We expect travel to come back in a bigger way only by 4QCY22 (i.e. 3QFY23), allowing SATS to achieve net profit without government grants, which should also mark the resumption of dividends.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
TAY Wee Kuang CGS-CIMB Research | https://www.cgs-cimb.com 2022-02-24 2022-02-24
Read also CGS-CIMB's most recent report:
2023-01-14 SATS - Peek Into Pro-Forma WFS Numbers Ahead.
Previous report by CGS-CIMB:
2022-12-02 SATS - Finalisation Of Funding Structure For WFS Acquisition.