SATS - UOB Kay Hian 2024-05-31: FY24 Beat Expectations; Earnings Recovery To Accelerate In FY25

• SATS’s FY24 net profit of S$56.4m beat our forecast of S$41.4m, due to slightly better-than-expected margins and higher-than-expected JV/associate contribution in 4QFY24. SATS declared a final dividend of 1.5 cents for FY24.
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• We raise our FY25 net profit forecast for SATS by 36% to S$215m while maintaining FY26 forecast unchanged at S$285m.

FY24 results beat expectations.

• SATS (SGX:S58)'s FY24 headline net profit came in above our expectations at S$56.4m (FY23: loss of S$26.5m), compared with our full-year forecast of S$41.4m. The beat was mainly attributable to:
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  2. higher-than-expected contribution from JVs and associates.
• Despite overall weaker seasonality, SATS managed to achieve q-o-q higher net profit in 4QFY24 at S$32.7m (3QFY24: S$31.5m). The q-o-q increase was driven by better performance in APAC under SATS's original businesses which benefitted from better operating leverage.
• On the other hand, WFS posted q-o-q lower operating profit of S$38.7m in 4QFY24 (3QFY24: S$67.5m), in line with the weaker seasonality.
• Note that SATS's 4QFY24 headline net profit was adversely impacted by several one-off items, such as integration expenses and impairments of some legacy investments. Excluding these one-off items, SATS's 4QFY24 and FY24 core earnings stood at S$47.3m and S$78.5m, respectively.

Resumes dividend payment.

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Roy Chen CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-05-31 SGinvestors.io

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