Singapore Airport Terminal Services Limited (SATS)

106 Pages·2002·3.81 MB·English

CONTENTS
Corporate Information 4
Financial Calendar 4
Financial Highlights 5
Chairman’s Statement 6
Board of Directors 8
Organisational Structure 10
Our Overseas Investments 11
Milestones 12
Staying Focused in Challenging Times 14
– Building a Bigger International Presence
– Our People
– Our Community
Airport Services 20
– Passenger Services
– Baggage
– Apron Services and Maintenance
– Cargo
Inflight Catering 30
Aviation Security Services 34
Aero Laundry and Linen Services 36
Corporate Governance 38
Financials 45
OUR MISSION REGISTERED OFFICE
20 Airport Boulevard
SATS Inflight Catering Centre 1
Singapore 819659
SATS aims to be the best handling agent in the world,
providing airport ground handling, inflight catering and CORPORATE WEBSITE
www.sats.com.sg
aviation security services of the highest quality, while
INVESTOR RELATIONS CONTACTS
giving value to customers and shareholders, and career
Tel:[phone]
fulfilment to staff. Fax:[phone]
“ I invent.”
“ I manage.”“ I deliver.” “ I identify.” “ I focus.”“ I assist.”“ I serve.”
“ I communicate.” “ I lead.” “ I explore.” “ I excel.”
“ I seek.” “ I develop.”
“ I innovate.” “ I build.” “ I provide.”
“ I guide.” “ I create.” “ I invent.” “ I empower.”
SATS annual report 2001/2002 1
“ we make it happen.
2
”
everyday.
every minute, every hour,
SATS annual report 2001/2002 3
CORPORATE INFORMATION
BOARD OF DIRECTORS REMUNERATION COMMITTEE CORPORATE MANAGEMENT
Cheong Choong Kong Richard Charles Helfer Prush Nadaisan
Chairman Chairman Chief Executive Officer
Singapore Airport Terminal Services Limited
Michael Tan Jiak Ngee Michael Tan Jiak Ngee
Deputy Chairman Member
Karmjit Singh
Chew Choon Seng Hong Hai Chief Executive
Director Member SATS Airport Services Pte Ltd
Barry Desker
NOMINATING COMMITTEE
Director Joseph Chew Khiam Soon
Barry Desker Chief Executive
Richard Charles Helfer Chairman SATS Catering Pte Ltd
Director
Cheong Choong Kong
Hong Hai Member Lim Kei Hin
Director Chief Financial Officer
Ng Kee Choe
Ng Kee Choe Member Ee Tiang Hwee
Director
Acting Senior Vice-President
Ow Chin Hock COMPANY SECRETARY (Apron /Passenger Services)
Director
Annabelle Yip Wai Ping
(Appointed 21.5.02)
Leong Kok Hong
Jimmy Phoon Siew Heng REGISTRAR Senior Vice-President
(Cargo)
Director KPMG
(Appointed 21.5.02)
Registrar and Transfer Office
Tan Chuan Lye
138 Robinson Road #17-00 Senior Vice-President
AUDIT COMMITTEE The Corporate Office (Catering)
Ng Kee Choe
Singapore 068906
Chairman Denis Marie
Hong Hai AUDITORS General Manager
Member SATS Security Services Pte Ltd
Ernst & Young
Chew Choon Seng Certified Public Accountants Wong See Heng
Member
10 Collyer Quay #21-01 General Manager
Aero Laundry & Linen Services Pte Ltd
SATS BOARD COMMITTEE Ocean Building
Singapore 049315
Cheong Choong Kong Ong Thiam Guan
Chairman Nagaraj Sivaram General Manager
Audit Partner Aerolog Express Pte Ltd
Michael Tan Jiak Ngee
Member
Chew Choon Seng
Member
FINANCIAL CALENDAR
31 March 2002 5 June 2002 26 July 2002
Financial year-end Despatch of Summary Financial Payment of 2001-2002
Report to shareholders final dividend
17 May 2002
Announcement of 2001-2002 results 20 June 2002 25 October 2002
Despatch of Annual Report Announcement of 2002-2003
20 May 2002 to shareholders half year results
Media / analyst briefing on
2001-2002 results 9 July 2002 28 October 2002
Annual General Meeting Media / analyst briefing on
2002-2003 half year results
4
FINANCIAL HIGHLIGHTS
%
Group ($ million) 2001-2002 2000-2001* Change
Total revenue 895.3 887.2 + 0.9
Total expenditure 628.6 692.6 – 9.2
Operating profit 266.7 194.6 +37.1
Profit before tax 287.5 210.9 +36.3
Profit after tax 212.8 170.6 +24.7
Profit attributable to shareholders 212.9 170.6 +24.8
Share capital 100.0 100.0 –
Distributable reserves 829.5 660.7 +25.5
Non-distributable reserves 0.8 0.6 +33.3
Shareholders’ funds 930.3 761.3 +22.2
Return on shareholders’ funds (%) 25.2 25.0 + 0.2point
Total assets 1,487.9 1,329.2 +11.9
Net liquid assets 253.5 172.2 +47.2
Value added 654.9 641.5 + 2.1
Per share data
Earnings before tax (cents) 28.8 21.1 +36.5
Earnings after tax (cents)
- basic 21.3 17.1 +24.6
- diluted 21.3 17.1 +24.6
Net tangible assets (cents) 92.2 76.1 +21.2
Dividends
Interim dividends (%) 20.0 20.0 –
Proposed final dividend (%) 40.0 40.0 –
Dividend cover (times) 4.6 3.9 + 0.7time
Employee productivity
Average number of employees 9,227 9,147 + 0.9
Revenue per employee ($) 97,028 96,989 n.m.
Value added per employee ($) 70,973 70,141 + 1.2
Operating Data
Airfreight throughput 1.32 1.43 – 7.9
(in million tonnes)
Passengers served (in millions) 23.68 23.99 – 1.3
Inflight meals prepared (in millions) 21.77 22.86 – 4.8
Flights handled (in thousands) 75.95 75.56 + 0.5
Notes:
1. SATS financial year is from 1 April to 31 March. Throughout this report, all financial figures
are stated in Singapore Dollars, unless stated otherwise.
2. Return on shareholders’ funds is the profit after taxation expressed as a percentage of the
average shareholders’ funds.
3. Net liquid assets is derived by offsetting current loan liabilities against liquid assets.
4. Earnings per share is computed by dividing the profit attributable to shareholders by the
number of fully paid shares in issue.
5. Dividend cover is profit attributable to shareholders divided by net dividends.
* Figures restated for comparative purpose as a result of compliance with revised/new
Statements of Accounting Standard (“SAS”) wef 1April 2001.
n.m. Not meaningful.
SATS annual report 2001/2002 5
CHAIRMAN’S STATEMENT
Dear Shareholders,
I am pleased to report that SATS has managed to weather the difficult conditions of
the past year well. Despite falling demand and revenue, especially after September 11,
we succeeded in increasing profit levels.
The key to this was our strong focus on managing costs, which was achieved with
the unstinting effort of management and staff. A drive for greater efficiency and
productivity was put in place from the start of the year when it was clear the global
economy would steadily decline. All aspects of SATS’ operations were reviewed but
even as costs were driven down, we continued to expand abroad and at home.
During the year, we entered into three new joint ventures in Taiwan, India and
Singapore and commenced operations at the new $270-million Airfreight Terminal 6
and $30-million Express Courier Centre 2 at Changi Airport, ensuring capacity for
future growth.
In the first six months of the year, cargo processed declined by 11% as a result of
the economic slowdown, while meals produced decreased marginally by 1.4%
compared to the same period the previous year. Flight frequencies and passengers
handled increased by 4.4% and 2.9% respectively.
The September 11 events changed the traffic profile in the second half of the financial
year and caused declines of between 3% and 11% for cargo tonnage, passenger traffic,
meal volumes and flight frequencies.
In response, staff and management tightened their belts, reducing costs and improving
efficiency even further. In addition, they volunteered temporary pay cuts of between
2.5% and 5%, and 7% and 10% respectively. The Board was part of the united effort
as it decided to reduce Directors’ fees.
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Because of these measures and zero provision of profit sharing bonuses
for the year, the Group was able to record a 24.8% increase in net
earnings after tax to $212.9 million. The growth in profit was largely
attributable to a 9.2% reduction in operating costs as revenue
increased only marginally by 0.9%.
Associated companies contributed $22.5 million (8.9%) to the Group’s
profit. The Board has decided to recommend a final dividend payment
of $0.04 per share.
Having satisfactorily navigated its way through challenging times, SATS is
well positioned to continue its growth as economic conditions improve.
The Group will continue to seek new joint ventures and acquisitions at
home and abroad to expand its scope of operations and firmly entrench
itself as the region’s leading integrated ground handling and inflight
catering provider.
I wish to express my deepest appreciation to all employees for their
commitment and performance and to my fellow Board members for their
support and advice.
Cheong Choong Kong
Chairman
SATS annual report 2001/2002 7
BOARD OF DIRECTORS
DR CHEONG CHOONG KONG
Chairman, SATS and Deputy Chairman and CEO, Singapore Airlines Limited.
Dr Cheong is also the Chairman of SIA Engineering Company Limited and serves as Board
Director of Singapore Press Holdings Limited, Virgin Atlantic Limited, Virgin Atlantic Airways
Limited and Virgin Travel Group Limited.
He is the Vice-Chairman of Oversea-Chinese Banking Corporation Ltd, Chairman of the National
University of Singapore 11th Council, Vice Chairman of the Singapore-United States Business
Council and member of the Board of Governors of the Singapore International Foundation.
Dr Cheong graduated with a Bachelor of Science with First Class Honours in Mathematics from
Australia’s University of Adelaide on a Colombo Plan scholarship. He went on to earn a Masters
of Science and a Ph.D. from the Australian National University in Canberra. He was Associate
Professor at the University of Malaya before joining Singapore Airlines Limited in 1974.
MR MICHAEL TAN JIAK NGEE
Deputy Chairman, SATS and Senior Executive Vice President (Commercial), Singapore Airlines Limited.
Mr Tan is also the Chairman of Singapore Airlines Cargo Pte Ltd and sits on the Board of Virgin
Atlantic Limited, Virgin Atlantic Airways Limited and Virgin Travel Group Limited.
He served as a member of the Singapore National Tourism Plan 21 and the Singapore Tourism
Board. He has also served as a Board member of the Pacific Area Travel Association for many
years, and represented SIA in the Singapore Government’s Manpower 21 Project.
MR CHEW CHOON SENG
Senior Executive Vice President (Administration), Singapore Airlines Limited.
Mr Chew is also the Chairman of SMRT Corporation Limited, Trans-Island Bus Services Limited,
TIBS Holdings Limited, Singapore MRT Limited and Singapore LRT Pte Ltd, and Singapore Aircraft
Leasing Enterprise Pte Ltd.
He is alternate Director of Virgin Atlantic Limited, Virgin Atlantic Airways Limited and Virgin
Travel Group Limited.
Mr Chew obtained his Bachelor of Engineering degree with First Class Honours from the
University of Singapore, followed by a Masters in Operations Research and Management Studies
from London’s Imperial College.
MR BARRY DESKER
Director, Institute of Defence and Strategic Studies.
Mr Desker is also the Chairman of the Board of Governors of the Singapore International
Foundation, Jurong Port Pte Ltd and Singapore Technologies Marine Ltd. He is a Trustee of
Singapore’s Institute of Southeast Asian Studies.
His past portfolios include being Chief Executive Officer of Singapore Trade Development Board,
Singapore’s Deputy Permanent Representative to the United Nations in New York, and
Singapore’s Ambassador to Indonesia. He was previously on the Boards of Sime SembCorp
Engineering Sdn Bhd, as well as Sembawang Engineering and Construction Pte Ltd (now
SembCorp Utilities Pte Ltd).
Mr Desker, a President’s Scholar, graduated from the University of Singapore with a Bachelor of
Arts (First Class Honours) degree and obtained his Masters degree from the University of London.
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MR RICHARD CHARLES HELFER
President and Chief Executive Officer, Raffles Holdings Limited.
Mr Helfer is also the Chairman and Chief Executive Officer of Raffles International Limited in addition to his
appointment as Chairman of Societe Montreux Palace SA.
He is the Senior Advisor to the Minister of Tourism in Cambodia and Deputy Chairman of Singapore’s Ministry
of Manpower National Advisory Council on Skills Recognition. He sits on the Board of the Singapore Hotel
Association, Nanyang Technology University and the Preservation of Monuments Board.
Mr Helfer graduated with a Bachelor of Arts (Honors) degree in Hotel and Restaurant Management from Michigan
State University, U.S.A.
DR HONG HAI
President and Chief Executive Officer, Haw Par Corporation Limited and Haw Par Healthcare Limited.
Dr Hong is also a Director of Haw Par Corporation Limited, Haw Par Healthcare Limited, IDT Holdings (Singapore)
Limited, Poh Tiong Choon Logistics Limited, Asia Food and Properties Limited and Golden Agri-Resources Limited.
He serves as Deputy Chairman of the Singapore-Sichuan Trade and Investment Committee, Chairman of the
Economic Committee of the Singapore Chinese Chamber of Commerce and Industry, and Chairman of the Trade
Working Group of Asia Europe Business Forum VI. He is also a member of the Traditional Chinese Medicine
Practitioners Board.
Dr Hong was previously a Board member of Singapore Telecommunications Limited and also served as a Member of
Parliament and as Chairman of government parliamentary committees as well as a member of various statutory boards.
Dr Hong has a Bachelor of Engineering (Honours) degree from the University of Canterbury, a Masters degree in Public
Administration from Harvard University and a Ph.D. in Economics from the Carnegie-Mellon University, U.S.A.
MR NG KEE CHOE
Vice-Chairman, Development Bank of Singapore Limited.
Mr Ng also serves on the Board of Governors of the Singapore International Foundation. He is Vice-Chairman
of the Institute of Banking and Finance, Chairman of Singapore Power Limited and Director of the Development
Bank of Singapore Limited and Wing Lung Bank Limited.
He was previously Chairman of The Insurance Corporation of Singapore Ltd and a Director of DBS Group Holdings Ltd,
DBS Thai Danu Bank Public Co Ltd, Singapore Technologies Engineering Ltd and DBS Kwong On Bank Limited.
Mr Ng graduated with a Bachelor of Science (Honours) degree from the University of Singapore.
DR OW CHIN HOCK
Ambassador-at-Large (part-time), Ministry of Foreign Affairs.
Dr Ow is also the Deputy Chairman of the Institute of Southeast Asian Studies. He has held several positions in
the Singapore government, the most recent being Minister of State for Foreign Affairs, Singapore and Mayor of
Tanjong Pagar CDC District and Chairman of the Tanjong Pagar-West Coast Town Council, from 1997 to 2001.
He was Executive Chairman of Pan-United Corporation Limited and Chairman of its joint venture companies in
China, and also director of its subsidiaries, from 1993 to 1997.
Dr Ow holds a Ph.D. in Economics and an MA (Economic Development) from Vanderbilt University, Nashville,
Tennessee, U.S.A. He was a Ford Economic Fellowship Scholar and also won the Fullbright Grant.
MR JIMMY PHOON SIEW HENG
Managing Director of Corporate Stewardship, Temasek Holdings (Private) Limited.
Mr Phoon is a Director of SMRT Corporation Ltd and SIA Engineering Company Limited.
He was previously an Executive Director of Standard Chartered Merchant Bank Asia Limited and a Deputy
Director in the Ministry of Finance.
Mr Phoon holds a Bachelor of Economics (Honours) degree from Monash University, Australia.
SATS annual report 2001/2002 9