SATS

SATS: Net profit rose 10% YoY to $44.3m though if 1Q10 results are adjusted for $6.1m in Jobs Credit aid that did not recur in the latest quarter, actual YoY growth would have been 29%. Aviation-related non-food business grew 10% YoY, in line with the number of passengers handled (+14%), flights handled (+7%) and cargo tonnage (+13%). The food business also did well. Inflight catering revenue rose 8% YoY, reversing its decline of the past six quarters, while non-aviation revenue grew 9%.

According to mgtm, Coolport has started operations on 17 June but we do not expect start-up costs in the short term as existing customers such as SIA, Qantas and BA are being cut over to the new facility. In fact, SATS was optimistic that the new capabilities of the perishables handling centre will attract new customers within the next 12 mhs. KE maintains its BUY recommendation on SATS with a higher TP of $3.48. Catalysts include new customers for CoolPort, M&A and potentially higher div.