SATS (SGX:S58)’s 2QFY24 (Jul to Sep 2023) revenue nearly tripled y-o-y and increased 6.9% q-o-q to S$1.3b, driven by the consolidation of WFS and continued travel recovery.
2QFY24 results beat expectations
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Share of profit from associates/JV continued to improve, on the back of stronger travel recovery. Consequently, SATS's PATMI returned to profit at S$22.2m in 2QFY24, compared to losses of S$9.9m in 2QFY23 and S$29.9m in 1QFY24.
No interim dividend was declared, same as last year.
Leveraging on enlarged global networks to drive cargo business
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According to the International Air Transport Association (IATA), global cargo volume grew for the first time in 19 months in Aug 2023 and continued to grow moderately by 1.9% y-o-y in Sep 2023. Management notes that air cargo volume is showing signs of gradual recovery amid uncertain global economic outlook but is not expecting a sharp near-future recovery.
SATS managed to secure new commercial wins in 1HFY24 and will continue to leverage its global networks and leading position in the market to win new contracts for its cargo business.
Fair value estimate of S$3.20
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
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