Financial Review

Highlights

The Group achieved revenue of $1,729.4 million in the financial year ended 31 March 2017, a growth of $31.2 million or 1.8% year-on-year. Revenue from Food Solutions and Gateway Services grew 0.6% and 3.4% respectively. Excluding the food distribution revenue transferred to our joint venture company, SATS BRF Food Pte. Ltd., the Group’s underlying revenue would have increased $76.4 million or 4.5% while Food Solutions’ underlying revenue would have grown 5.3%.

Continuous effort on improving productivity and operating leverage has enabled the Group to keep the increase in its operating expenditure at 1%, a slower rate than the growth of 1.8% in revenue. This positive jaw ratio has yielded positive results with the Group achieving an operating profit of $230.6 million for the year, an improvement of $15.9 million or 7.4% over the past year. Operating margin has improved by 0.7 points to 13.3%. Associates/joint ventures contributed a total of $65.2 million profit, an increase of $17.2 million or 35.8% year-on-year. This included recognition of $15 million negative goodwill resulting from the increased stake in Evergreen Sky Catering Corporation (ESCC) from 15% to 25% during the financial year. Following the acquisition, ESCC has been reclassified from long-term investment to associate.

In FY2016-17, the Group recorded a gain of $9.3 million from the disposal of its assets held for sale, the Senoko property. Conversely, the divestment/dilution of shareholdings in its associates resulted in a loss of $0.7 million.

Backed by good operating results and contributions from the associates/joint ventures, the Group achieved profit attributable to owners of the Company of $257.9 million, an increase of $37.3 million or 16.9%. Return on equity was 16.7%, 1.7 percentage points higher than the year before.

The Group ended the year with a strong balance sheet. Total assets were $2.3 billion with cash and short term deposits of $505.8 million. Free cash flow generated during the year was $220.8 million and debt-to-equity ratio remained healthy at 0.07 times.

Earnings Per Share and Dividends

The Group’s earnings per share grew 16.6% year-on-year from 19.9 cents to 23.2 cents for the year.

During the year, the Company paid an interim dividend of 6 cents per share in respect of FY2016-17 amounting to $66.9 million. The Board of Directors has proposed a final ordinary dividend of 11 cents per share to be paid, subject to shareholders’ approval in the forthcoming Annual General Meeting. If approved, the total ordinary dividend for FY2016-17 will be 17 cents per share, continuing the track record of paying progressive, sustainable dividends.

Download Full Financial Review