Tuesday, June 16, 2009

SIA - SATS FY09 Net Profit S$147m

4QFY09 net profit S$42m — SATS (81% owned by SIA) reported 4QFY09 net profit of S$42.2m (+12%qoq and -12%yoy) which included 2 months contribution from SFI (S$4.8m). Excluding SFI’s contribution and S$15.5m net gain from sale of property to DHL in 4Q08, 4Q09 net profit of S$37.4m was 15% higher than the same period last year, and down 1% qoq.

Operating performance — 4Q operating profit S$45.7m included S$5.8m contribution from SFI. Excluding SFI, operating profit rose by S$6m or 18%yoy as weaker business volume (unit services -8%yoy, unit meals - 14%yoy, passengers handled -11%yoy, cargo -21%yoy) was offset by lower expenses, including a S$12.3m grant under the Jobs Credit Scheme.

Overseas units still impacted by poor economic conditions — 4QFY09 PBT contribution from AJVs fell by 26%yoy due to poor business volume and higher expenses related to capacity expansion. For FY09, AJVs contributed S$22m, less than half of FY08, with all JVs except JAS (Indonesia) showing lower contribution. Worst hit included the ground handling JVs in Beijing (- S$10.4m) and Hong Kong (-S$5.4m), and inflight catering JV (-S$4.7m) in India.

Capital management — Final DPS of S$0.06 bringing FY09 total DPS to S$0.10, or 73.5% payout ratio (FY08: S$0.14, 77.5% payout). Mgmt has not decided on whether to refinance S$200m term loan maturing Sep-09, but added that internal cash generation could be used to repay the loan.

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