Home » News » Helloworld bears $15.1m loss, but retail networks still “largely intact”

24 February, 2021

Helloworld bears $15.1m loss, but retail networks still “largely intact”

Helloworld Travel has suffered a $15.1 million loss in the first six months of the 2021 financial year, but it wasn’t all bad news for the ASX-listed group.

The half-yearly net loss after tax was a decent swing away from the $22.7 million profit Helloworld enjoyed during the first six months of FY20.

Underlying earnings before interest, taxes, depreciation and amortisation came in at a loss of $6.5 million, while Helloworld’s half-yearly revenue plummeted by 85 per cent to $29.6 million, and its total transaction value (TTV) fell by 88 per cent to $432.9 million.

You can check out the breakdown of Helloworld’s results across Australia, New Zealand and the rest of the world below:

Australia

New Zealand

Rest of the world

In positive news, Helloworld said its retail networks in Australia and New Zealand were still “largely intact” at the end of 2020 due to the “enormous perseverance and effort” of members.

“The $128 million Consumer Travel Support Program, announced in December 2020, has assisted agents across Australia, while in New Zealand, agents have benefited from the NZ$47.2 million Consumer Travel Reimbursement Scheme,” the company said.

“Agents in some states in Australia have also benefited from specific or generic business assistance from state and federal governments.”

Helloworld noted that many agencies have significantly reduced their staff numbers and are running with skeleton staff levels to service refunds, domestic bookings and enquiries for travel in 2022 and beyond.

The company has supported franchise networks by suspending franchise and marketing fees through to 30 June 2021. Since March 2020, Helloworld has foregone $7.5 million in fees.

The group’s network status at the end of December was as follows:

Helloworld’s corporate travel operations in Australia are continuing to run at roughly 42 per cent of TTV and revenue compared to last year, while TTV and revenue for its corporate travel business in New Zealand has increased to 28.7 per cent and 30 per cent respectively, compared to the first half of FY20.

The company said its wholesale and inbound businesses in Australia and New Zealand continue to be “dramatically impacted”.

Australian TTV for the first half of FY21 was down 95.8 per cent, while in New Zealand, TTV fell 97.8 per cent over the six-month period.

In the medium term, Helloworld said pent-up demand for travel was “extremely strong”, and it anticipates this demand to grow significantly in 2022, 2023 and 2024 once the COVID-19 pandemic is over.

“Development in vaccines, herd immunity, faster testing and other initiatives will see a resumption in airline and cruise travel in certain areas towards the end of 2021, and a resumption in more widespread international travel in 2022,” it said.

“Demand for travel services from both retail leisure agents and corporate travel management companies will soar in a world where professional and personalised travel advice and management will be critical to travellers’ sense of security and comfort.”

Based on current expectations, Helloworld expects to continue incurring cash losses of between approximately $1 million and $1.5 million per month for the next six months, before moving to a “modest” profit in the first half of FY22 and then improving in the second half.

The company reassured investors that it has sufficient liquidity to maintain operations beyond the end of 2022 based on current levels and the cash burn rate.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

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