SATS

SATS: FY11/ 4Q11 results, above Deutsche’s estimates. FY11 revenue at $1.69b, +24%. FY11 underlying net profit from continuing operations (excl Daniels Group and other one-offs) was $177.5m, -4.3%. 4Q11 revenue was $433.3m, +7.8% yoy, as both gateway services and food solutions benefited from increased flights and higher passenger traffic at Changi airport, as well as improved performance by overseas subsidiaries SATS HK and TFK. Underlying net profit from continuing operations at $47.6m, almost flat yoy. Co has proposed a final div of 6cts + special div of 15cts. Incl interim div of 5cts paid in Dec ’11, total full yr div will be 26cts, translating to a yield of 9.9%. Co’s balance sheet remains strong, and presently has net cash of $316.5m. Post dividends, SATS will still have ~$83.7m net cash (7.55cts/sh). Mgt notes passenger traffic at Changi is antipicated to increase on the back of growing regional traffic as well as certain airlines expanding their networks. Says, these present growth opportunities for the Group’s gateway and food business in the domestic mkt, but may be balanced by weaker general cargo and a stronger SGD which would affect the performance of some overseas associates / JVs. The stock trades at 16.4x P/E, 1.9x P/B.