FLIGHT services company Sats reported that first-quarter earnings fell 6.3 per cent to $43.3 million amid pressures on regional aviation and increasing manpower costs.

Foreign exchange movements also hit the company in the three months to June 30.

Excluding one-off items, the underlying net profit was $43.4 million, 9.4 per cent lower than that a year earlier.

Revenue at the company, Changi Airport's biggest ground-handler, rose 0.2 per cent to $435.2 million.

Gateway revenue increased 2 per cent to $171.2 million owing to a growth in flights and airfreight handled.

However, food revenue declined 0.9 per cent to $262.7 million, arising mainly from lower revenue reported by its unit TFK Corp. This was due largely to the weakening of the Japanese yen.

Operating expenditure increased by 0.4 per cent to $395.5 million as higher staff costs and expenses on company premises and utilities were partially offset by the lower cost of raw materials and lower depreciation charges.

Operating profit for the quarter was $39.7 million, a drop of 2.5 per cent over the same quarter last year, owing to higher expenditure.

Earnings per share for the three months was 3.9 cents, down from 4.1 cents a year earlier.

Net asset value per share was $1.30 at June 30, up from $1.27 at March 31.

"Our operating landscape remains challenging in view of rising manpower costs and the ongoing pressure on regional aviation," said Sats in a statement.

"At Changi Airport, we expect moderate growth in passenger traffic and airfreight.

"We will continue to invest in our state-of-the-art facilities, comprehensive suite of services and new technologies to obtain scale advantages, improve productivity and enhance connectivity for our customers."

Sats said it is also growing new businesses and customer segments.

The results were released after markets closed. Sats closed flat at $3.18.