SATS Ltd. (SATS), a major air cargo handling service provider and airline caterer in Asia, expects fluctuations in the cargo business as supply chains adjust to a changing operating environment.
SATS reported its financial performance for the three months ended December 31, 2024 (Q3 FY25) and nine months ended during the same period (9M FY25), reflecting sustained growth in business volumes, outpacing industry trends.
It said that in Q3 FY25, SATS Group's revenue increased by 12.5% to S$1.52 billion (US$1.14 billion) compared to the same period last year due to continued business volume growth and rate increases.
Among others, revenue for its Gateway Services increased by 10.1% YoY to S$1.17 billion, reflecting both favourable market conditions and continued market share gains.
"Our cargo volumes exceeded IATA's global growth benchmarks, supported by broad-based demand and the shift of some ocean freight to air cargo due to Red Sea disruptions," SATS said.
It noted that for the nine-month period, April 1, 2024, to December 31, 2024, Group revenue increased by 14.0% to S$4.34 billion YoY due to business volume growth as well as rate increases from customers.
Revenue for Gateway Services increased by 10.8% YoY to S$3.32 billion.
"This growth reflects robust air cargo volumes across multiple sectors, including high-tech shipments, e-commerce, and other cargo streams, complemented by volume shifts from ocean freight due to ongoing geopolitical uncertainties," it said.
Looking ahead, the major air cargo handling service provider indicated a potential decline in cargo business due to current market uncertainties.
"While geopolitical uncertainties weigh on the general business environment, with tariff increases possibly having a negative impact on trade flows, we are confident we have the resilience to navigate the challenges," SATS said in a statement.
It noted that IATA anticipates an 8% increase in global passenger traffic in 2025, which will support the company's Asian food and overall ground-handling business.
"While the outlook for the cargo business may be volatile, we will continue to leverage our network, expertise, and market leadership position to help our customers adapt to the demand for air cargo logistics services as supply chains worldwide adjust to the new operating environment," it added.
Kerry Mok, president and chief executive officer of SATS, said, "Scale and operating efficiencies, boosted by strong seasonal demand, delivered profitability for the SATS Group."
"We remain focused on pursuing our strategy to grow our network, enhance operational excellence, and work with our customers and partners to develop innovative and specialised services."
Mok added: "With our global network, we are in a good position to support our customers in their response to short-term adjustments in this period of volatility while keeping long-term opportunities in mind."
