SATS Ltd reported an 11.3% YoY rise in revenue but saw a 23.7% fall in net profit to S$49.9m in 4QFY19, mainly due to a 62.9% fall in share of associates and JVs. This brought full year net profit to S$248.4m, which was a 5.0% fall from a year ago.

Excluding one-off items, reported core earnings grew 2.2% to S$241.4m for FY19, which was within our expectations. For the full year, Food Solutions saw a 4.4% increase in revenue while Gateway Services reported a 7.9% growth. Free cash flow remained healthy.

The group has declared a final dividend of S$0.13/share, bringing the full year dividend to S$0.19/share, compared to S$0.18/share last year. Pending an analyst briefing, we maintain our HOLD rating but put our fair value estimate of S$5.23 under review.

Source: OCBC Research - 17 May 2019