Caterer and ground handler SATS is buying a stake in its Malaysian peer Brahim’s as it seeks to remake itself into a regional player with a wider spread of businesses. Should investors bet on its transformation?

At SATS’ meal assembly line in Changi, visitors are greeted by the smell of food and the whirring of machines. The airline caterer and ground handler has installed 14 robotic arms and 62 cameras to pick, check and place airline service wares and food items onto meal trays. This high-tech kitchen has begun to pay off.

On Nov 4, the company reported its results for 2QFY2016 (SATS has a March year end). In spite of a 4.4% y-o-y drop in revenue to $422.7 million, earnings increased 26.8% to $59.7 million, a record rate of earnings growth. The revenue decline was largely owing to lower contributions from the food solutions business following some restructuring. It sold Australian subsidiary Urangan Fisheries and transferred its food distribution business to a joint venture called SATS BRF.

Excluding the impact of these actions and the depreciation of the Japanese yen, SATS says it would have recorded an $11 million increase in revenue for its food solutions business. “The BRF JV took out $29 million of revenue from our consolidated revenue picture. [Urangan Fisheries] accounted for $2 million [and the yen depreciation for another] $5 million,” says SATS CEO Alex Hungate.