Singapore's SATS Q2 revenue rises 9% on higher cargo and meal volumes; sees cost pressures

Overview

• Singapore gateway services and food solutions firm's Q2 FY27 revenue rose 9% year-over-year

• Net profit attributable to owners increased 2.8% to S$81.1 mln, aided by lower tax expenses

• Q2 EBITDA declined 2.1% year-over-year as margins fell on higher input costs

Outlook

• SATS expects global network demand to remain resilient, with strong cargo and meal volumes

• Company sees operating costs under pressure from higher energy prices and rerouted flights

• SATS expects input costs in Food Solutions to remain elevated in the near term

Result Drivers

• CARGO AND MEAL VOLUMES - Revenue growth driven by higher cargo and meal volumes across all regions, led by the Americas and Asia-Pacific

• HIGHER INPUT COSTS - Profitability pressured by higher input costs and operational disruptions, including effects from the Middle East conflict

• LOWER TAX EXPENSES - Net profit increase supported by lower tax expenses

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the airport operators & services peer group is "buy"

• Wall Street's median 12-month price target for SATS Ltd is S$5.10, about 27.4% above its November 11 closing price of S$4.00

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 20 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)