SATS Ltd. reported first-quarter fiscal 2027 revenue of S$1.68 billion, an 11.3% increase from the same period last year, driven by a 14.4% surge in cargo operations to S$893.1 million. The company handled 2.59 million tonnes of cargo, up 8.6% year-over-year and 10.2% sequentially, with total cargo including associates and joint ventures reaching 3.49 million tonnes, a 7.7% increase.
Gateway services revenue rose 12.8% to S$1.33 billion, comprising 53% of total revenue, while food solutions revenue grew 5.4% to S$346.0 million. Geographic revenue growth was led by the Americas at 15.4% to S$595.8 million, followed by EMEA at 11.7% to S$339.4 million, Singapore at 8.7% to S$575.8 million, and APAC at 5.4% to S$165.3 million.
EBITDA increased 5.9% to S$290.0 million, but margins declined to 17.3% from 18.2% a year earlier, reflecting higher costs and operational disruptions. Operating profit rose 6.9% to S$133.8 million, though EBIT margins narrowed to 8.0% from 8.3%. Net profit attributable to shareholders grew 6.0% to S$75.1 million.
Cash flow weakened, with operating cash flow before lease payments falling 14.4% to S$141.5 million, and free cash flow turning negative at S$(22.6) million compared with S$(4.5) million a year ago. Management cited higher receivables and working capital timing as key factors. Debt levels edged up 0.8% to S$2.39 billion, while net current assets improved to S$42.9 million from net current liabilities of S$(73.1) million.
The company’s gross debt-to-EBITDA ratio remained steady at 3.3 times, within Moody’s target of below 4.0 times and aligned with SATS’s FY2029 goal of below 3.5 times. EBITDA-to-interest coverage improved to 4.5 times from 4.4 times, though still below the 5.2 times target. Return on equity increased to 10.8% from 10.7%, with a long-term target exceeding 15.0% by FY2029.
Management noted margin pressures from Middle East disruptions, inflation, and flight schedule volatility, while highlighting new ground handling wins and steady aviation food demand despite regional challenges. The company expects EU de minimis removal to weigh on e-commerce cargo volumes in the coming quarter.
