Analysts positive on Sats despite company's first-quarter loss

Despite posting first-quarter losses, ground handler Sats drew positive calls from analysts, who cited the company's upward business momentum, strong cash flow, cash-generating ability and expected smooth integration of its newly acquired air cargo logistics business Worldwide Flight Services (WFS).

- Ven Sreenivasan

Investment houses CGS-CIMB, UOB Kay Hian and DBS Research had 12-month price targets of $2.86, $2.99 and $3.20, respectively, on the stock of the airport and food services operator. Other investment houses are expected to release their analyses this week.

In its first set of financial statements following the successful acquisition of WFS in April, Sats reported a loss of $29.9 million for the first quarter ended June 30. Contributing to the loss were one-off costs related to the integration of the European company, which amounted to $12.6 million.

Excluding the integration-related one-off expenses, the underlying loss after tax and minority interest narrowed to $17.4 million, compared with a loss of $19.5 million a year earlier, which included government reliefs of $9.4 million.