{"id":233678,"date":"2025-05-10T00:50:29","date_gmt":"2025-05-10T00:50:29","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/summary-of-sats-q1-fy22-business-updates\/"},"modified":"2025-05-10T00:50:29","modified_gmt":"2025-05-10T00:50:29","slug":"summary-of-sats-q1-fy22-business-updates","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=233678","title":{"rendered":"Summary of SATS Q1 FY22 Business Updates"},"content":{"rendered":"


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SATS reported its Q1 FY22 Business Updates on Thursday, 22
\nJuly. SATS is a company that I\u2019ve been following closely, and this article
\nsummarises my takeaways from the business updates provided. <\/span><\/p>\n

Key Operating Statistics<\/b><\/span><\/p>\n

SATS shared a number of key operating statistics, including
\nnumber of flights handled, meals served, passengers handled, cargo tonnage and
\ntotal number of employees. These operating statistics include SATS and its
\nsubsidiaries, but exclude JVs and associates. In their business updates, SATS
\nhad only provided figures for 5 quarters from Q1 FY21 (Apr to June 2020) to the
\nlatest quarter Q1 FY22 (Apr to June 2021). Given that Covid-19 had already
\nresulted in a decline in air travel from early 2020, I have added in two more
\nprior quarter\u2019s of SATS\u2019 operating metrics for a more meaningful comparison. Q1
\nFY21 coincided with the peak of the lockdown in Singapore, while Q4 FY20 was
\nalready impacted by a slowdown in aviation volumes. Q3 FY20 would represent
\npre-Covid operating statistics. <\/span><\/p>\n

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Number of Flights handled is still way below pre-covid
\nlevels, even though air travel in other parts of the world have largely
\nrecovered. For instance, airlines in the US are actually unable to keep up with
\ndemand due to the shortage of workers, leading them to cut flights. SATS\u2019 disadvantage
\nhere is that Singapore does not have a domestic air travel market, unlike
\nlarger countries. On the positive side, SIA, which is SATS\u2019 largest customer, recorded
\na 13.7% passenger load factor for April 2021, up from 4.6% in April 2020. SIA
\naims for 32% of pre pandemic capacity by July 2021. <\/span><\/p>\n

The cargo segment continues its recovery, and SATS noted
\nthat global air cargo volumes has risen beyond pre pandemic levels.<\/span><\/p>\n

SATS has also drastically reduced their workforce, from around
\n17,000 employees pre pandemic to around 11,000 employees in the latest quarter.
\nStaff costs remains SATS\u2019 largest operating expense, accounting for around 42% of
\ngroup expenditure. \u00a0<\/span>\u00a0<\/span><\/span><\/p>\n

Q1 FY22 Revenue Mix<\/b><\/span><\/p>\n

One of the positives is that SATS has continued to diversify
\ntheir revenue base beyond the travel sector, with 46% of Q1 FY22 revenue coming
\nfrom its non travel related businesses. SATS\u2019 non travel businesses include
\ncommercial catering, with SATS being one of the caterers for individuals under
\nquarantine in Singapore.<\/span><\/p>\n

Q1 FY22 Financial Performance<\/b><\/span><\/p>\n

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SATS reported Q1 PATMI of $6.4m, profitable for the second
\nconsecutive quarter. Govt reliefs continue to provide support to SATS\u2019
\nfinancials, as SATS received total govt reliefs of $45.5m for the quarter.
\nWithout this, SATS would have reported a PATMI loss. <\/span><\/p>\n

On an EBITDA basis, SATS has reported four quarters of
\npositive EBITDA since Q2 FY21, recording negative EBITDA of 33.9m only in Q1
\nFY21, when travel restrictions were the strictest. <\/span><\/p>\n

Free cash flow, defined as net cash from operating
\nactivities less cash capital expenditure, was a positive 7.9m for the quarter.<\/span><\/p>\n

As of 30 June 2021, SATS had total debts of 726m, a reduction
\nof 147m from the previous quarter as a 150m term loan had been repaid. If
\nrights of use liabilities were excluded, total debt would be 531m instead.
\nCompared to a cash position of 753m, SATS is in a net cash position of 222m.
\nDebt to equity ratio stood at a manageable 34%. <\/span><\/p>\n

Conclusion<\/b><\/span><\/p>\n

SATS remains my preferred pick for betting on the recovery
\nof the aviation sector, due to its cost structure being more variable as
\ncompared to airlines. Airlines face high capex requirements as contracts with
\nmanufacturers require them to continue taking delivery of aircraft even when
\nbusiness has slowed. Ongoing maintenance costs and fuel costs are also
\nsignificant. Whereas SATS has proved to be extremely nimble in cost reductions
\nto minimise losses. Tellingly, despite the huge drop in passenger numbers due
\nto Covid-19, SATS remains in a net cash position with a reasonable gearing
\nratio of 34%, and has not required any rights issues to raise funding. <\/span><\/p>\n

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Disclaimer: This article is intended for informational and discussion purposes only, and do not constitute financial advice. When in doubt, please contact a licensed financial adviser.<\/span><\/i><\/span><\/span><\/p>\n

If you enjoy my articles, please ‘Like’ my Facebook Page at:\u00a0<\/b><\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

\u00a0 SATS reported its Q1 FY22 Business Updates on Thursday, 22 July. SATS is a company that I\u2019ve been following closely, and this article summarises my takeaways from the business updates provided. Key Operating Statistics SATS shared a number of key operating statistics, including number of flights handled, meals served, passengers handled, cargo tonnage and […]<\/p>\n","protected":false},"author":1,"featured_media":233679,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[907,86712,86711,4028,12572],"dealstore":[],"offerexpiration":[],"class_list":["post-233678","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-business","tag-fy22","tag-sats","tag-summary","tag-updates"],"yoast_head":"\nSummary of SATS Q1 FY22 Business Updates - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=233678\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Summary of SATS Q1 FY22 Business Updates - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"\u00a0 SATS reported its Q1 FY22 Business Updates on Thursday, 22 July. 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