- SATS (SGX:S58)’s headline net profit of S$78.9m (+13.2% y-o-y, +11.3% q-o-q) was a solid beat to our expectations.
- SATS had a number of one-off items/adjustments back in FY25; adjusted for all these items, SATS’ core net profit rose 8.2% y-o-y to S$79.6m in 2QFY26 (2QFY25: S$73.6m), by our estimate. 1HFY26 core earnings formed 58% of our full-year forecast.
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Stronger-than-expected cargo performance...
- Within the gateways services segment, air cargo revenue rose by a strong 14.3% y-o-y, driven by:
- a 7.1% y-o-y expansion in cargo tonnage (or 9.9% y-o-y on a comparable basis adjusting for some contract model change in the US), and
- a 6.7% growth in revenue per tonnage (or 2.3% y-o-y on a comparable basis).
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…outpacing IATA data for an 8th consecutive quarter, demonstrating resilience of SATS’ global network.
- SATS’ 7.1% y-o-y cargo tonnage growth in 2QFY26 (9.9% y-o-y on the y-o-y comparable basis) was a clear beat to IATA’s estimated 4.2% y-o-y growth for global air cargo volume, indicating that SATS has been continuously gaining market share in the global air cargo handling market.
- By geography, SATS recorded a strong 19.3% y-o-y cargo volume growth in EMEA, and a healthy 7.0% y-o-y cargo volume growth in APAC, outpacing the industry average growth in both regions.
- In North America, SATS’ reported cargo volume dropped 7.9% y-o-y; however, if adjusted for the contract model change, SATS’ North American cargo volume would have been largely flat y-o-y, broadly in line or slightly better than the industry average pace of a low-single-digit y-o-y decline.
Slight drop in food solutions operating profit (-6.8% y-o-y) was due to one-off adjustments.
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