Technology

“We see a world of opportunity”: Webjet boss upbeat despite $157m loss

Huntley Mitchell

Huntley Mitchell

Webjet’s financial results continue to reflect the impact of COVID-19 on the travel industry, with all of its businesses reporting significant falls across key metrics in FY21.

The ASX-listed company slumped to a $156.6 million loss in the nine months to 31 March 2021, compared to a $143.6 million loss in the 12 months to 30 June 2020.

Webjet announced last year it was changing its financial year end-date in FY21 from 30 June to 31 March in order to capture the “strongest contribution” from its WebBeds business, and also because the reporting window aligns better with its travel industry peers in the Northern Hempishere.

The group’s earnings before interest, taxes, depreciation and amortisation was at a $125. 3 million loss in the nine-month financial year, compared to a $90.1 million loss in FY20.

Webjet’s revenue for the nine months was $38.5 million (compared to $266.1 million in FY20), and total transaction value (TTV) was $453 million (compared to $3 billion in FY20).

Commenting on the results, Webjet managing director John Guscic said: “We are hopeful that vaccine rollouts will allow travel markets to reopen and continue to do everything we can to make sure we are optimally positioned to capture the significant global B2B market opportunity and accelerate bookings growth in our B2C businesses.

“We know there is strong demand for travel – we’ve seen that with the performance of Webjet OTA, with Australian domestic bookings reaching 95 per cent of pre-COVID bookings in April.

“Webjet OTA has always had a key strength in servicing the domestic leisure market, and our ability to scale costs in line with demand meant it was profitable as soon as borders opened.

“The Australian and New Zealand domestic borders remaining opened also meant we saw Online Republic return to profitability in April, and believe there is considerable scope for that business as global leisure markets reopen.”

Guscic said that while WebBeds continues to be impacted in most regions, he is confident of a rebound once borders reopen.

“We’re already seeing that in North America. The US is among the first to reopen and WebBeds is already at 83 per cent of pre-COVID TTV in that market,” he said.

“WebBeds is committed to emerging from COVID as the number one global B2B provider and we are confident our transformation initiatives will materially reduce costs across the business.”

Webjet’s MD said the company has not “stood still” while waiting for markets to reopen, and taken the opportunity to transform and be ready for the recovery.

“We have looked at ways to be more agile, lean and efficient across the entire business – from service and quality, to operating and marketing, to capital strength, and management restructuring.

“We have created a global platform that will reduce costs at scale by at least 20 per cent and provide the structural support to focus on those markets that will rebuild fastest, where competitors are weakest, and we can target the number one position.

“We see a world of opportunity. We know people cannot wait to travel – to reunite with families and loved ones, to embark on adventures and to explore the world.

“Webjet has significant cash reserves, we have a team that’s always been agile and hungry to win, and we are ready to go.”

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