Search

Budget 2015: What you need to know right now
BUDGET 2015 COVERAGE
Budget 2015: What you need to know right now

Income taxes will be hiked to shoulder massive investments.
6470 views

MORE NEWS
FOOD & BEVERAGE | Staff Reporter, Singapore
Published: 22 May 13
522 views


SATS to "structurally increase" dividends: Maybank

Special dividends will keep on coming.

According to Maybank Kim Eng, it believes SATS is gearing up for higher dividend distributions to shareholders after it expressed a goal to optimize its capital structure. The research firm said SATS has a sound cash position to actually push through with progressive increments in dividends in the next three years.

Here's more from Maybank Kim Eng:

Structurally higher dividends. We see a multi-year re-rating of SATS as we believe that the company is likely to structurally increase their dividend distribution to shareholders. SATS announced special dividends in the last 3 years and we expect this to be the new normal. Management had previously highlighted their desire to optimize their capital structure (long run target: net debt to equity of 0.3X), which we view as a signal for structurally higher dividend distributions to shareholders.

Sufficient funding for M&A. Even after factoring in progressive increments in dividends over the next 3 years, we forecast a net cash position of more than SGD400mn by the end of FY16E. This implies that SATS would have a sizeable war chest of c.SGD900mn, should they achieve a capital structure with net debt to equity of 0.3X by the end of FY16E.

TFK Corp on the rebound. SATS offers an exposure to the aviation market in Japan through its inflight catering arm, TFK. The latest results from SATS suggest that TFK had turned a corner with FY13 EBIT contribution of SGD12.1mn (FY12: SGD0.3mn). While the weaker JPY would lead to lower contributions upon translation to SGD, we believe that the positive economic impact of a weaker JPY (eg. tourism, business travel) should result in a net positive effect on air travel demand and TFK. Either way, we expect TFK to continue leveraging on SATS’s existing business relationships with various airlines to clinch more contracts.

Our forecasts are above consensus. We are 8% above street view for our FY14-16E estimates, as we believe that consensus numbers may not have factored in incremental contributions from new contracts and our expectations of margin expansion as they scale up their operations.



Sign up for our newsletter

 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.

Tags: SATS, more news, food & beverage, higher dividend distributions, capital structure

LATEST FOOD & BEVERAGE JOBS »
  • No jobs posted on this category.
    PRINT ISSUE »

    Subscribe Now
    What factors are keeping expats rooted in Singapore?

    402 views

    What factors are keeping expats rooted in Singapore?

    446 views

    Can Asian private equity outgrow the west?

    140 views

    MOST READ EXCLUSIVES

    Singapore’s 10 most sought-after 40 and under investors

    Singapore’s 10 most sought-after 40 and under investors

    Check out who made the cut.

    by KRISANA GALLEZO
    19 Dec 2014 | 45229 views
     

    Singapore’s first permanent lifestyle market opens in Bukit Timah

    Singapore’s first permanent lifestyle market opens in Bukit Timah

    Over 20 brands and labels are gathered together under one roof.

    by KRISANA GALLEZO
    5 Jan 2015 | 32975 views

    Singapore’s top 5 work from home jobs

    Singapore’s top 5 work from home jobs

    Here are jobs that you can do while sitting on your couch or in your favorite coffee shop.

    by KRISANA GALLEZO
    11 Dec 2014 | 30523 views
     

    Singapore Business Review’s 2014 Class of 40 and under

    Singapore Business Review’s 2014 Class of 40 and under

    Meet a summa cumlaude graduate who rises from poverty to become JP Morgan’s head of corporate finance.

    by KRISANA GALLEZO
    12 Jan 2015 | 29452 views

    Find out the 10 most expensive districts to rent an HDB flat in Singapore

    Find out the 10 most expensive districts to rent an HDB flat in Singapore

    Glitzy Bukit Timah is off the list.

    by KRISANA GALLEZO
    19 Dec 2014 | 26866 views
     

    Singapore’s hot new restaurants in December

    Singapore’s hot new restaurants in December

    Japanese restos take over Singapore’s sizzling dining scene.

    by KRISANA GALLEZO
    17 Dec 2014 | 9394 views

    This food hub in Seah Street brings a throwback experience to dining

    This food hub in Seah Street brings a throwback experience to dining

    It offers an exciting lunch menu which changes every week.

    by KRISANA GALLEZO
    16 Jan 2015 | 6349 views
     

    Singapore’s first news aggregation app attracts 1 million users in two years

    Singapore’s first news aggregation app attracts 1 million users in two years

    Stay in the loop with news and lifestyle content from SBR and 600 other publishers.

    by KRISANA GALLEZO
    10 Dec 2014 | 3267 views

    This startup created the world’s first bed sensor technology

    This startup created the world’s first bed sensor technology

    No more patients accidentally falling off hospital beds.

    by KRISANA GALLEZO
    14 Jan 2015 | 2704 views
     

    Too many business cards? Why don’t you try Sansan’s business card management service?

    Too many business cards? Why don’t you try Sansan’s business card management service?

    After Singapore, this contract management company plans to expand in the APAC region.

    by KRISANA GALLEZO
    12 Feb 2015 | 2608 views

    Go inside the gorgeous new headquarters of Ingredion in Singapore

    Go inside the gorgeous new headquarters of Ingredion in Singapore

    Its state-of-the-art kitchen space is not to be missed.

    by KRISANA GALLEZO
    18 Dec 2014 | 2576 views
     

    Spencer Ogden gets funky with its newest trademark space in Singapore

    Spencer Ogden gets funky with its newest trademark space in Singapore

    The company invested over $1M to make this signature office possible.

    by KRISANA GALLEZO
    5 Feb 2015 | 2449 views

    What Singaporean investors can expect from Okinawa’s development

    What Singaporean investors can expect from Okinawa’s development

    A 40% tax cut in setting up business is expected to lure investors.

    by KRISANA GALLEZO
    12 Dec 2014 | 2233 views
     

    Meet INSEAD’s new chairman of the board

    Meet INSEAD’s new chairman of the board

    Find out how Andreas Jacobs plans to bring “business as a force for good”.

    by KRISANA GALLEZO
    14 Jan 2015 | 2216 views

    Check out this integrated office cum lab of Friesland Campina in Singapore

    Check out this integrated office cum lab of Friesland Campina in Singapore

    A curved glass wall resulted in a 90% open-plan office.

    by KRISANA GALLEZO
    17 Feb 2015 | 2066 views
     

    Jack Wills opens its first store in Singapore

    Jack Wills opens its first store in Singapore

    A 'fun' brand that values the Brit vibe. Put your game face on!

    by KRISANA GALLEZO
    10 Dec 2014 | 1979 views

    The future of innovation: What’s next after Facebook and Twitter?

    The future of innovation: What’s next after Facebook and Twitter?

    A video version of Twitter might be under way.

    by KRISANA GALLEZO
    11 Dec 2014 | 1780 views
     

    What it’s like going into business with your significant other

    What it’s like going into business with your significant other

    A couple who founded an artisanal food outlet, P.Bistro, shares experience.

    by KRISANA GALLEZO
    9 Jan 2015 | 1740 views

    This could be your best pal when no one’s around to help during an emergency

    This could be your best pal when no one’s around to help during an emergency

    TagBio's ID-Life features accessories with critical info embedded in QR codes.

    by KRISANA GALLEZO
    16 Dec 2014 | 1494 views
     

    SFIC Institute's new training hub overhauls carpenters' career image

    SFIC Institute\'s new training hub overhauls carpenters\' career image

    It’s the first carpentry training center in Singapore’s furniture industry.

    by KRISANA GALLEZO
    10 Dec 2014 | 1298 views

    Kungfumath wants to revamp boring e-learning portals

    Kungfumath wants to revamp boring e-learning portals

    “Play with numbers” in its literal sense.

    by KRISANA GALLEZO
    5 Dec 2014 | 1292 views
     

    PocketMath makes buying mobile ad impressions easier

    PocketMath makes buying mobile ad impressions easier

    It integrates over 20 ad exchanges and offers over 20B impressions a day.

    by KRISANA GALLEZO
    9 Feb 2015 | 1291 views

    The heat is on: This office literally gets a bit hot for their green drive

    The heat is on: This office literally gets a bit hot for their green drive

    Discover how they execute their green initiatives in the office.

    by KRISANA GALLEZO
    22 Jan 2015 | 1245 views
     

    MetLife builds its first global R&D hub

    MetLife builds its first global R&D hub

    It bills itself as a first-of-its-kind innovation centre for the insurance industry.

    by KRISANA GALLEZO
    26 Jan 2015 | 1225 views

    FTMSGlobal Academy Singapore launches new weekend MBA

    FTMSGlobal Academy Singapore launches new weekend MBA

    The course fee is below $20,000.

    by KRISANA GALLEZO
    8 Jan 2015 | 1020 views
     

    Here’s how migrants can be sure their loved ones back home paid the doctor a visit

    Here’s how migrants can be sure their loved ones back home paid the doctor a visit

    This NRI-focused startup also gives migrants monthly feedback from the doctor.

    by KRISANA GALLEZO
    7 Jan 2015 | 931 views

    ENVision campaign‘s ‘hard truth’ could make you think twice

    ENVision campaign‘s ‘hard truth’ could make you think twice

    Singapore might run out of space for trash by 2035 and more.

    by KRISANA GALLEZO
    15 Dec 2014 | 746 views
     
    close Don't Show Again

    STAY INFORMED! Get our free weekly newsletter