Good morning, everyone. Welcome to the SATS fourth quarter and full year results briefing for financial year 2026. I'm David Wei, Group Head of Strategic Communications. Before we begin, I turn your attention to the forward-looking statement now on screen. A quick safety reminder. Wherever you are joining us from, do be aware of your surroundings at all times. Please make your safety a priority before joining this call, a recording of which will be available on our website. With me today are Kerry Mok, SATS President and CEO, and Timothy Tang, our Chief Financial Officer. I will hand over to Kerry to take you through the business update. Kerry, please.
Thank you, David, and a very good morning, everybody. Thank you for joining our call this morning. Let me just jump straight into the results. I think you have read the headline. Very good set of results for this full year. This is actually our record profit in our history, so SGD 6.25 billion, up 9%. Cargo continues to be very strong. This is the 10th consecutive quarter that we have beaten IATA's number. Both APAC and EMEA are going well, and that's offsetting some of the softness we see in Americas. Albeit Americas is now stabilizing and not deteriorating further. We still have very strong contract wins and renewals. This includes EVA Air in the U.S. EVA is a very important customer of ours in Americas, and we are happy to renew them. In Spain is Air Europa Cargo, which is also another big customer of ours in Spain.
When you go to fourth quarter metrics below, 9.8% growth on the fourth quarter. This traditionally is our softest quarter, but again, good momentum shown across both business segments. EBITDA has grown 3.9% now to about SGD 276 million, partly also reflecting the headwinds of Middle East, as you recall. The Middle East conflict started in March itself. PATMI grew very well by 31%, now to SGD 50.7, and we're pleased with that performance. Of course, given the growth in our profit, we are proposing a final dividend of SGD 0.05 per share. That's up from the SGD 0.035 the prior year. On the right-hand side, you can see all metrics showing good growth across cargo, flight schedule, meals, both aviation and non-aviation showing good momentum as well. Next slide. Just some updates, the usual updates. Key wins. I mentioned earlier, EVA Air.
Besides renewing, we've also added Washington Dulles International Airport into the network. Europa is both Madrid and Barcelona, and those are very key hubs for us in European gateways. On the M&A side, we actually completed an acquisition of Aviapartner. That's in Brussels Airport. It's given us additional 33,000 sq m of cargo terminal space. I think importantly, this acquisition gives us a full freighter ramp handling and airside transport. This gives us the ability to then control end-to-end for our cargo business based out of Brussels. On the food side, we've launched a World Chefs Culinary Training Program. We are the first caterer to do that. It's really part of our structured career pathway for our chefs.
I think this is an important step because chef is actually a key capability of ours, and we want to make sure that we are able to attract the best chef to join us. On awards side, we're very pleased that we've— I think this is for maybe the seventh time that we've won the PAX Readership of Airline Caterer of the Year. Really just recognition of our authentic Asian cuisine that we provide. On the technology and AI side, this is an important aspect of our business. We have completed a 15-week trial of an automated DIM. Dimension in Motion is actually capturing the DIM information for our cargo business. With this, it gives us ability to move much faster and capture information real-time, enabling our cargo to move much faster within our warehouse. Again, we'll share more as we develop more such programs going forward.
People side, named top employer. This is important. We are a very people-oriented organization. It's important that we're recognized for the people policies that we put in place to attract the best talents out there. We've also won a Gold Award for Operation Excellence by Cathay. That's something that is given to our team in EMEA. Next. Just some high-level numbers. You can see the usual numbers. Very pleased that we have covered almost 10 million tonnes in cargo. From including AJV side, good growth momentum also to now about 13.2 million tonnes. This quarter is typically the weakest quarter, numbers have dropped down to 3.21 million tonnes. Compare against last year, there's also a good growth momentum shown. Flights handles increase primarily due to a contract that we have started in Brazil.
This is with Azul Air, Azul is actually the largest low-cost carrier in Brazil, we're pleased to be performing that service for them in their hub in São Paulo. Aviation meals, you can see good growth momentum as well. In fact, over the last few quarters, it's been up to about SGD 40 million. That overall is a good number in terms of growth and really down to travel peak and increase in China domestic. One of it is also driven by our acquisition also of Nanjing Weizhou that's doing very well in China itself. Meals non-aviation, this quarter, again, solid momentum, just maintaining those levels that we have been performing those last few quarters. On the head count side, again, it's driven by the Brazil setup and the new operations that we have acquired out of Belgium. We are maintaining numbers fairly solidly as well.
This chart just shows the consecutive quarters. Albeit it's narrowed a little bit. We hope to be able to push more, but this is again, a pleasing quarter that we're still showing good growth momentum. Even though, year-on-year it's been good growth from previous years. This plus this year, 4.7%, is even better. Like-for-like, it's about a small 0.3% in like-for-like growth. That part there is something that we're watching out to see how we continue to make progress. A non-like-for-like, is 4.4% and this really reflects the new wins that we had across our network. That momentum is something that's important and we continue to place a lot of emphasis through our commercial team. We are present in, again, 14 out of the top 30 air cargo stations.
With direct access to airside, putting us in a very good momentum to work with our customers. Next slide. What I want to highlight in this page is our business model, I think over the last few years has proven to be very resilient. Despite whatever challenges that's being thrown at us, whether it's tariff tension, Red Sea issue, or now the current Middle East conflict, I think we have been able to show growth momentum. This is important. It means that with the network that we have, with a key emphasis on working with customers, we are able to continue this growth trajectory. Importantly also improving our margins. This is an important part of our FY 2029 target, and as we say, as long as we continue to grow our profitability, we will increase the dividend payout.
Very pleasing to note that this year the payout is increased by 40% to now SGD 0.07. Again, cargo tonnage continues to grow nicely. It's up at 9.7%. Hopefully, momentum will carry us to double-digit volumes this coming year. We have also strengthened our capability. We're not stopping here. We continue to look for areas where there's white space in both network as well as capability. It's important that we continue to drive extension of adjacency. We talk about specialized services in the past. This is an important aspect. No matter what the macroeconomic situation is, we do have the ability to focus on additional value services that hopefully will drive our revenue stream, even though volumes may taper off in the short term due to various reasons.
This really shows our ability to absorb some of these challenges, and we have enough growth opportunity and paths for us to manage both the top line as well as the bottom line. With that, I'll hand over to Tim, who will take you through the financial summary. Thank you.
Yeah, thanks, Kerry, and welcome everyone. Good to be here again on our earnings announcements. I think as Kerry said, maybe just to sum it up, from my perspective, of course, we're pleased with the results, in particular, given the overall volatility in the market. Obviously delivered record revenue, as Kerry noted, in spite of the Middle East conflict that we're experiencing here. I will try to attempt to give a bit more color, in terms of the impact of the Middle East conflict, because I assume that there will be lots of questions on that one, in any case. As I go through, let me see if I can just add a little bit more color to the overall numbers there. To begin with, I think as Kerry's noted also, overall organizational growth, business grew, revenue, and across both segments.
We're seeing, in particular, strong performance on our gateway side of things. Obviously the food side continues to be very, very resilient as well. Both markets are absolutely impacted by the Middle East conflict in March in both top line, but actually more importantly, throughout the cost structure, mainly because March is a typically higher month out of the three quarters. The organization was structured and geared up that way to service the March volume, before the conflict started. I think if you look at the EBIT number, obviously that number is impacted primarily due to the conflict, given the weighting of the March. If you look within January and February, actually, in terms of run rate, I would say that you can sort of guide that number more towards the year-to-date growth, because that is effectively the trajectory of the business.
What we can say is outside of the Middle East conflict then, the business actually was running very, very strong, and very much in line with our year-to-date expectations and numbers from a year-on-year growth perspective, along with margin accretion as well. Going a little bit further down the page here on the SOA JV. Once again, it is the Middle East conflict that impacts the SOA JVs. A lot of them do service the Middle East. We'll talk a little bit more details around how we're seeing the market later on in terms of the overall trend coming out and as we move through the conflict. Nonetheless, it has impacted our JVs.
If you look at within the underlying trends, once again, trying to normalize out a little bit of the Middle East conflict impact. The year-on-year growth actually in Q3 was probably more indicative of where our numbers were tracking prior to the impact. Whilst still modest growth, the underlying rate is actually stronger than that on an SOA JV standpoint. Lastly, on the PATMI, there is certainly some one-off impact here as we've also highlighted on the page. Firstly, the PATMI number is impacted negatively by an impairment charge. We did go through some cleaning up of assets in our non-core portfolio that negatively impacted that number. On the flip side, we did have some upside in tax, the tax line. Obviously, timing was in 4Q, but actually, if you look at the effective tax rate for the full year is a better guide.
We generally have been guiding around this 27%-27.5%. We were tracking at 27.5% in FY 2025. I think that's the best place to start. We did have some benefit overall for the full year that then offset it partially or most of the impairment charge then, if you will, for 4Q. Looking at the full-year number, I think it's a better guide on the effective tax rates. I'll take on to the next slide. A little bit more color then into the segments. Ultimately, I think Kerry has highlighted the IATA comparatives. We obviously continue to deliver 10 consecutive quarters of beating the IATA number.
It is worth noting, before I jump into revenue, if you look at that metric, a lot of that adjustment factor for contractual change will now move towards the dotted line, I think as we move forward, because obviously that impact annualizes. The gap, while it is closing against the IATA number, we do know that it will track now to a more favorable comparison because that underlying business volume obviously continues to be there. I think if you look at the revenue across both segments, suffice to say, very similar line, excluding the impact of the Middle East. January, February run rate was very close to year-to-date run rate. Diving a little bit further into maybe perhaps the ground number. We do have that ground number growing significantly higher than prior year in this quarter.
That is due to a business that we acquired and started, Azul in Brazil. That directly impacts the ground revenue number. Excluding that, the ground revenue number is low single-digit traveling. Once again, very similar to year-to-date numbers. On a full operating base now. This is the new base for the ground operations. Lastly, I think if you look across food, once again, that is also impacted by the Middle East conflict. Ultimately, I think the aviation number continues to be very steady while the non-aviation is being improved or contributed by some of the overseas facilities that we continue to ramp up. Next slide, please. I think I've covered most of the top left-hand side. Maybe just a few more notes. Operating cash flow, we did benefit from some working capital timing.
We noted that in Q3, and we did get the other side of that in Q4. I think I'll talk more about the cash flow in the next slide, looking at a full year, which is better indicative of the overall performance. Just a few more notes on this slide. Number one, we obviously continue to be very diligent in how we pay down our debt. Overall borrowings, roughly SGD 160 million of reduction in borrowings. We do see that as a fundamental portion of our capital allocation strategy. Continue to make very good progress, and we will continue to see that opportunity and evaluate those as we move forward. Obviously, within our framework of looking at CapEx and turning dividends to the shareholders as well. Lease liabilities grew on the other side.
That generally, whilst from a metric standpoint, it may be a negative on some metrics, I think we see these generally as positive because they are as a result of us securing and getting into new facilities in most cases. I think lastly, if you look at that net current liabilities line, obviously, we continue to manage that number. Significant improvement versus last year, just from a balance sheet management standpoint, primarily due to a lot of successful refinancing of facilities moving to a better timeline from a maturity standpoint. I think the last thing I would like to highlight on the right-hand side is obviously the margins component are all looking at going the wrong direction, more for Q4. Once again, I want to just make sure I reflect that is a direct result of the Middle East conflict.
As I've noted already, if you look within the underlying performance in Jan, Feb before the conflict, we did see margin accretion across the business. Next slide, please. Lastly, on the cash flow, I think taking all that into consideration, the full-year cash flow obviously reflects the operating performance, and it's been a strong operating performance reflecting in an overall cash flow performance. Working capital-wise, if you look at our net DSO and DPO days, we've increased that by two days. There is definitely some positive working capital that's been achieved by the team in terms of the overall working capital management. Ultimately, I think the result speaks for itself. Translating to free cash flow ultimately is really just a CapEx story. We've guided in the past that we really work within the 4%-6% of revenue range from a CapEx standpoint.
We've ended the year, you'll see on here, roughly at around 5.4%. Translating that to free cash flow, obviously slightly lower, but with SGD 123 million more CapEx from a cash flow perspective. We've invested and continue to do that in a very targeted way. We do believe we have areas that we do want to continue to invest in, both for growth and obviously also for our enhanced competitiveness, in particular in Singapore Hub, as we continue to invest in our home market and the test bed for a lot of innovation. That's really contributing towards that uplift.
Beyond that, I think if you look within the CapEx number, it is on projects that I think the market is aware of, which is the finalization of our Thailand facilities on the food side, in particular also our finalization of the cruise terminal in Singapore as well, along with other facilities around the world that's contributing to the higher number. I think that is all for me. What I'll do is now I'll pass it back over to Kerry to sum it all up for us.
Thank you, Tim. I think this slide just showcase where we are in terms of our FY 2029 ambition. Fair to say, I think we are, as a company, we're progressing well towards our stated target. There are some short-term challenges that we need to navigate. On the whole, I think we are pointing in the right direction, and the numbers speaks for itself. Continue to show margin improvement against the target we set. This is something that is a big focus for us, even with all the challenging macroeconomic situation that we are facing. A big improvement also has been the ROE. We're now into the double digit side. We're pleased with that 10.7% performance in ROE. Still some way to go in my FY 2029 target of 15%. The gross debt EBITDA, we've shown good momentum in bringing that down.
We are in a comfortable position in there, I think Tim alluded earlier with our capital allocation plan, we have the ability to manage that much better now. Cash flow, again, due to the strong operating performance, we have now increased it by SGD 110 million, getting much closer to the SGD 750 million that we set for ourselves. All in all, good progress shown, we're confident that we can continue this path going forward. Let me jump straight into the outlook, I'll cover that in the three different segment. On the cargo side, demand did fall by 4.8%, partly also because a lot of supply disruption as well. We have seen other carriers using other locations to move things through, we are seeing good growth as well in parts of our network that's driven by the rerouting of cargo itself.
We continue to have new wins. The non-like-for-like will be an area that we will be focusing on to drive more of our growth. Adding to new network is where we continue to get our focus on. There are still a lot of areas that we're not present. The team will continue to see where it adds on to our network and gives us that synergy. We will focus on those. E-commerce volume is still growing. Interestingly, and I alluded last quarter around the EU fee implementation, that will shift things around in terms of the freighters, but the network that we have in Europe position us very well to continue to get those flows. In particular, Liége is a big freighter hub airport, and we are seeing good growth momentum in Liége itself.
Beyond e-commerce, we still have growth in the tech product, whether is it semiconductor, capital equipment, that's still showing good growth momentum in the commodity that we are carrying. On the ground side, obviously Asia-Pac is driving that. A lot of the rerouting is also benefiting Asia. Singapore, Thailand are all airports where a lot of reroutings are going and increasing long-haul flights from Asia to Europe to cover up for Middle East, clearly is actually helping our ground business as well. We have very limited exposure. In fact, I said the last time, both in Saudi and Oman are benefiting now from some of the rerouting. We are well-placed there to continue to serve our customers in those hubs itself. The one thing that we need to be mindful of is the LCC.
Because of the fuel cost, their business model cannot afford the high fuel prices. Frankly, quite a lot of flight cancels are all related to LCC flights. That's having an impact on some of our ground business as well. With that is new services and new capacities are coming up to cover for those canceled flights. If again, if you have those network, you continue to benefit. We're pleased that the wins in Azul and the Allegiant Air will continue to drive our year-on-year non-like-for-like growth. These two new wins are very important for us in Americas and will strengthen our ground handling business this coming year itself. On the food side, we believe this is going to be stable.
Partly also because although there are flights canceled to the Middle East, still remains, but carriers such as Singapore Airlines and others are adding on more flights from Asia to Europe. In fact, those are long-haul flights, which has additional catering requirements. Again, we'll drive some of the volumes that we'll see in the coming months ahead. The non-aviation side remains very resilient. Our Bangalore and Tianjin kitchen are now starting to make meaningful progress. Obviously, still not where we wanted to be, but we're showing good growth momentum for Bangalore and Tianjin, and we believe that will still continue as we develop more products for the market itself. We need to watch out for input costs for food.
Clearly, with the increase in energy cost, it will impact our food prices in the near term, and something that the commercial team will have to work on with our customers to see how we can mitigate some of the costs. We do have contracts in place, and as the contracts run out, we will be facing some increase in food costs. We read that in NWA, which is Nanjing Weizhou, we have actually increased our shareholding by another 40%. That brings us up to 90% of Nanjing Weizhou. We are actually commencing our integration on Nanjing Weizhou with our SATS China operation. We believe that will drive synergy for us. The growth of Nanjing Weizhou in aviation frozen meal is doing very well. In fact, they're running out of capacity in the existing site.
Integrating them with our operations will mean that we can balance off the production load with our existing facility. Will help us to drive more synergies within China. Importantly, it will set us up nicely for a lot of our Chinese clients in China itself. Next slide. The Middle East conflict, I thought I'll just give you a few pointers from our perspective, how we are seeing it. When it happened, the immediate impact was clearly both Saudi, Oman was also disrupted at onset. Again, that was just a quick immediate reaction. I think quickly, and of course, Gulf carriers canceled their flights, so cargo flows kind of stopped for a while, but it's mostly basically a belly space or passenger flights. Freighter flight continues, even though what they have done is they've rerouted their freighters.
Instead of flying back to Middle East, they are flying point-to-point, that actually helped us to mitigate those volume drop as well. Clearly, the surge in energy prices is affecting a lot of our input costs, particularly our utilities, as we use some of our locations where we still have diesel equipment. Those input costs are being felt in the immediate term. Currently, it is now feeding through some inflations through utilities, ingredients, and packaging. That's where I think Tim has highlighted that March itself, we have seen some of the cost increase as well, we will continue to see that coming in, depending on how long this conflict will last. Jet fuel shortage and fuel price increase as well. Again, flight cancellation, flight new routes.
Something that we have to continue to deal with, and this is frankly the norm now in all the stations that we are managing. Our team is quite well-placed to manage the ups and down that's coming our way on a daily basis. The good news is our network is allowing us to capture some of the rerouting opportunities, and we're seeing that in our business already. Both Singapore and Bangkok have seen volume growth that reflects in the rerouting of the cargo itself. The good news is we found reconstruction, regional constructions happening. It is generating increased air cargo demand for industrial supplies and equipment. This, again, will help us in our cargo flows, where we are present, we can actually upload a lot of these supplies on the chartered planes.
Back to the Middle East.
Yeah, back to the Middle East. Yeah. Just going forward, depending on how long this will last, if it lasts longer, clearly, there will be impact on our operating costs, as the greater inflationary pressure will also pose a risk to the global economy. Something we're watching out for. We're very careful. We don't want to be ahead of ourselves. We need to manage the issues. The worst thing we want is a stagflation that will hit us going forward. That will then means globally, the economy will be affected. We do see increased demand and usage of air cargo, especially in times of disruption. This continues. We have seen that even with the recent Middle East conflict, where goods has to get there on time, and air charter is the only way to make it happen.
Post-conflict recovery will also drive some uplift, especially in regional trade volume. Again, this will create opportunity for us in air cargo itself. Obviously, with this geopolitical uncertainty, it really helps us to strengthen our relationships with our key clients. We are working with our key clients in a far more collaborative way and more strategic way as well, understanding where they're going and allowing us to make adjustments to our network and business to support them. I think by doing this, we believe we can create more stickiness and better relationship with our key clients. Of course, last but not least, our network and our service excellence in both businesses, I believe, will continue to position us well to work closely with our customers and hopefully allowing us to gain more market share going forward.
Thank you.