Singapore Airports Terminal Services (SATS) has reported a 17% increase in first quarter net profits, even though its aviation business has continued to flounder in line with the global economic downturn.
The ground-handling firm says that its net profit for the three months ended 30 June increased by S$5.9 million ($4.1 million) to S$40.4 million, buoyed by a 44% increase in group revenues to S$351.7 million.
However, the Singapore Airlines subsidiary says that the revenues from its airport services segment fell by 9.9% to S$120.9 million, mainly due to the decrease in cargo throughput and the number of passengers handled. Its food catering segment posted a 111% jump in revenues to S$229.4 million, mainly due to the recent acquisition of catering firm Singapore Food Industries.
"Profit contribution from our aviation business is expected to remain weak. Continued vigilance over cost in this segment will be our priority as we ride out this difficult period," says SATS.
"Over the last three quarters, we have managed a frugal agenda in concert with our unions to minimise overtime and expenses claims, cut capacity in our cargo operations, reduce contract staff and be more efficient in our workforce deployment. Our workforce in the aviation segment has also declined from 8,400 to the current levels of 8,100 due to natural attrition and reduction in foreign workers."
SIA is expected to get shareholder approval later this month to divest its stake in SATS. The airline said in May that it would give its shareholders a dividend "in specie" of the shareholding. It added that the move would allow it to concentrate on its airline and aircraft maintenance business, while SATS would be able to pursue opportunities that lessen its dependence on the aviation business.
Source: Air Transport Intelligence news
