- SATS's 3QFY25/9MFY25 revenue surged by 12.5%/14% y-o-y to S$1.5/4.3bn which was in line with our estimates at 26%/77% of our FY25e forecast. The strong growth was underpinned by air cargo volume improving by 16.6% y-o-y, meals served rising 24% y-o-y in 9MFY25.
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- SATS set an additional bonus provision in 3QFY25 on the back of the exceptional result, which resulted in higher operating expenses. Otherwise, the normalised EBIT margin would have been 9.2% (3QFY25: 6.2%).
The Positives
Cargo demand continues to shine.
- Gateway services revenue grew by 11% y-o-y to S$3.3bn, primarily driven by a 14.9% increase in air cargo tonnage. Inventory front-loading in 3QFY25 was more pronounced as Trump's tariff policy was well anticipated by the market.
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Finance costs may continue to trend down.
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