Gateway services boost SATS' profits

Margins for the segment rose to 7.5%.

Thanks to its gateway services, SATS reported a 19% growth in operating profit.

According to UOB Kayhian, the said segment's margin rose to 7.5%, benefitting from increased economies of scale with the Jetstar Asia and AirAsia contracts.

Meanwhile, local in-flight catering revenue remained the same, despite higher pax throughput growth at Changi.

"This implies that pricing for meals fell YoY. SATS alluded to the tough operating environment for its airline customers, however demand for premium meals remains robust," the brokerage firm said.

Meanwhile, its TFK’s revenue fell marginally by 0.7% yoy, due to a slight dip in volumes. For the full year, food solutions margins rose 0.9ppt to 17.1%, resulting in a 6% rise in operating profit on the back of a 0.6% top-line growth.