SATS - UOB Kay Hian 2022-11-10: 2QFY23 Core Losses Narrowing; Likely To Return To Profitablity Next Quarter

SATS - 2QFY23 Core Losses Narrowing; Likely To Return To Profitablity Next Quarter

SATS LTD. (SGX:S58) | SGinvestors.ioSATS LTD. (SGX:S58)
  • Excluding government reliefs, one-offs and professional fees related to the WFS deal, SATS’ core net loss stood at S$5m-10m in 2QFY23, a meaningful improvement over 1QFY23’s ex-relief core net losses of S$31.9m.
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  • Management has updated its financing plan for the WFS deal to use only straight equity and more debt.
  • Maintain BUY recommendation on SATS with an unchanged target price of S$3.08.

Meaningful improvement in SATS' core profitability.

  • SATS (SGX:S58) recorded headline net losses of S$9.9m in 2QFY23 (1HFY23: S$32.5m losses). Stripping out a one-off disposal gain of S$1.9m and government reliefs of S$11.4m, SATS’ 2QFY23 core net loss stood at S$21.6m in 2QFY23.
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  • Passenger business volume continued to recover; a slight dip in air cargo volume. In line with the aviation sector’s recovery, SATS’ business volume continued to recover in 2QFY23 – the volume of flights handled, meals served and passengers handled rose 20.0%, 28.7% and 29.9% q-o-q respectively.
  • Cargo tonnage handled declined 2.6% q-o-q, likely due to a normalisation of the air cargo business from the pandemic high and the slower near-term demand amid the weakening macroeconomic outlook.
  • Group revenue rose 14.2% q-o-q to S$429m in 2QFY23, driven by q-o-q higher revenue across all regions.

Expecting a turnaround for SATS in 3QFY23.

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Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @

Roy Chen CFA UOB Kay Hian Research | 2022-11-10

Read also UOB's most recent report:
2023-10-16 SATS - Gradually Improving Outlook With Stablising Global Air Cargo Demand.

Previous report by UOB:
2023-08-16 SATS - 1QFY24 Core Performance In Line; Focusing On Integration & Synergy Delivery.

Price targets by 4 other brokers at SATS Target Prices.

Listing of research reports at SATS Analyst Reports.

Relevant links:
SATS Share Price History,
SATS Announcements,
SATS Dividends & Corporate Actions,
SATS News Articles


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