SATS - UOB Kay Hian 2024-03-04: 3QFY24 Results In Line; Earnings Recovery On Track

• SATS’ 3QFY24 headline net profit of S$31.5m (+42.5% q-o-q) was within our guided range of S$25m-35m. Excluding a sizeable forex loss, 3QFY24 earnings would have been at close to S$40m, beating our forecasted range.
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3QFY24 headline net profit in line.

• SATS (SGX:S58)’s 3QFY24 headline net profit of S$31.5m was within our guided range of S$25m-35m. Revenue rose 6.5% q-o-q to S$1.37b, on the back of higher revenue from both food solutions (S$295m, +6.8% q-o-q) and gateway services (S$1.07b, +6.4% q-o-q).
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Significant q-o-q core earnings improvement masked by forex gains/losses.

• Note that core net profit reported by SATS has yet to adjust for the forex gains/losses, which had sizeable impacts in both 2QFY24 and 3QFY24.
• SATS’ 3QFY24 earnings was dragged by a forex loss of high single-digit millions (in Singapore Dollars), while 2QFY24 earnings was helped by a forex gain of similar sizes. Excluding these forex gains/losses, SATS’ 3QFY24 core earnings would be close to S$40m, a substantial improvement from 2QFY24 core earnings of about S$6m.

Strong JV/associate profits.

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Roy Chen CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-03-04 SGinvestors.io

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