SATS ASA - Lean and healthy

SATS continues manifestly to deliver on its strategy of premiumisation with currency adjusted membership revenue up 11% in Q423 (15% for the full year) and assurance of 'significant unleashed potential' within the existing estate in terms of capacity utilisation and membership yield. Operating leverage, complemented by tight cost control (Q423 currency adjusted opex down 2%) and minimal expansionary capex for the time being, provides scope for lucrative marginal revenue growth (Q423 EBITDA up tenfold on 13% higher revenue). Making the most of current resources is expediting debt reduction with leverage targeted to fall below 2x (2.3x at end 2023). On SATS' preferred metric of pre-IFRS 16 adjusted EBITDA, the consensus forecast of NOK732m for 2024 gives an EV/EBITDA of 6.6x.

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