SATS fell into the red with a S$43.7 million loss for its first quarter ended June 30, versus a profit after tax and minority interests of S$54.7 million a year ago, it said in a business update on Monday.

 

The ground handler and food solutions provider' s reduction in group expenditures was outpaced by the fall in revenue, which nearly halved from a year ago. This came as the decline in passenger and cargo movements in the first quarter " significantly impacted" SATS' performance. 

 

Loss per share stood at 3.9 Singapore cents for the quarter, compared with earnings per share of 4.9 cents a year ago.

 

Revenue for Q1 fell 54 per cent to S$209.4 million, from S$465.1 million a year ago, hit by declines from both its gateway services and food solutions segments.

 

SATS' aviation revenue fell 72.9 per cent to S$110.6 million, but non-aviation revenue grew 73.3 per cent to S$96.9 million as the group leveraged opportunities beyond aviation during the quarter.

 

Gateway services revenue dropped 67.9 per cent to S$71.6 million, while the food solutions segment was down 43.7 per cent to S$135.9 million.

 

The food solution segment' s relatively lower fall in revenue compared with the gateway services segment was due to a consolidation of new entities which boosted revenue. These entities are Country Foods, Nanjing Weizhou Airline Food Corp and Monty' s Bakehouse UK.

 

SATS' group expenditure decreased by 39.9 per cent on the year to S$245.4 million, with staff cost seeing the most significant reduction - down 58.7 per cent to S$96.5 million.

 

The fall in staff cost was due to a combination of factors such as government grants, lower contract services and a reduction in workforce required to manage lower volumes.

 

Licence fees were also lower in line with smaller aviation revenue.

 

No dividend was declared for the quarter, unchanged from a year ago. SATS pays dividends on a semi-annual basis for every six-month period ending March 31 and Sept 30, subject to review and approval.