Technology

Webjet’s “key disappointment” in half-yearly results

Huntley Mitchell

Huntley Mitchell

Webjet has taken a significant hit to profit growth in the first half of the 2020 financial year, which it largely blames on the collapse of a key client.

The online travel giant posted a net profit after tax of $9 million – down a whopping 64 per cent from the same period last year.

Webjet’s earnings before interest, taxes, depreciation, and amortisation fell 14 per cent to $46.4 million.

On a more positive note, the company’s half-yearly revenue rose 24 per cent to $217.8 million, and total transaction value (TTV) grew 25 per cent to $2.3 billion.

Webjet managing director John Guscic said the “key disappointment” during the six months to 31 December 2019 was the collapse of Thomas Cook – a customer of the company’s WebBeds business – in September.

“At the time of its collapse, Thomas Cook owed the company $44 million in unpaid receivables,” he said.

“We wrote of this amount as a bad debt during the period, which impacted the statutory result.”

However, Guscic assured investors that it has had no material adverse impact on the company’s liquidity, thanks to its “strong” cash position and balance sheet.

The main driver of Webjet’s half-yearly earnings in the first half of FY20 was its WebBeds business, which achieved EBITDA growth of 81 per cent to $57.3 million.

WeBeds’ revenue jumped 50 per cent to $127.5 million, its TTV grew 42 per cent to $1.5 billion, and its bookings rose 53 per cent to 2.4 million.

Earnings for Webjet’s online travel agency business remained steady during the first half of FY20 at $28.8 million. Revenue grew one per cent to $74.8 million, TTV rose three per cent to $708 million and bookings increased by one per cent to 795,000.

The company noted that the Australian market “continues to be challenging, with reduced capacity, weaker consumer sentiment and the recent bushfires all impacting demand for travel”.

Webjet’s Kiwi business, One Republic, reported a nine per cent drop in half-yearly earnings to $6.6 million, with revenue falling four per cent to $15.6 million.

On the plus side, One Republic’s TTV climbed seven per cent to $156 million, and its bookings increased by five per cent to 253,000.

Coronavirus impact

Webjet’s FY20 earnings guidance is now expected to be between $147 million and $165 million – up 14 per cent from FY19, but lower than first anticipated due to the coronavirus outbreak.

“Based on our 1H20 performance and TTV growth in January 2020, we would have been upgrading our previous FY20 EBITDA guidance,” Guscic said.

“However, we are seeing an impact on bookings and TTV across all our businesses as a result of the current COVID-19 outbreak, which will impact 2H20 EBITDA.”

Guscic said it was very difficult to predict the expected impact of the CVOD-19 outbreak on Webjet’s earnings in the second half of FY20, but the company has estimated it will be between $7 million and $15 million.

“We expect the impact of CVOD-19 to be one-off in nature, impacting earnings during the current period restricted travel and traveller uncertainty,” he said.

“Based on our experience with previous disruptions to travel, we expect our overall earnings profile to return quickly to prior expectations, taking into account rebooking of deferred travel and underlying earnings drivers.”

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Travel Agents

Flight Centre showcases agents’ expertise (and unveils new captains) in first-ever global brand campaign

A new captain and co-captains, a fresh tagline, a new microsite and a TikTok account – Skroo and his team sure didn’t muck around with Flight Centre’s first global campaign.

Share

CommentComments

Tourism

Experience Co expands portfolio with two big acquisitions

After getting its house in order and navigating its way through COVID, the ASX-listed company has made a couple of very big plays.

Share

CommentComments

Cruise

Royal Caribbean names new sales boss for Australia and NZ

After pulling a Michael Jordan and coming out of retirement, the much-loved and well-respected Peter McCormack is once again hanging up his boots at Royal Caribbean.

Share

CommentComments

Aviation

Air Canada introduces new refund policy for COVID-affected flights

And, in good news for agents, you can hold on to your loonies, with the Canadian carrier confirming it won’t recall any sales commissions on refunded tickets that it processes.

Share

CommentComments

Wholesalers

AAT Kings to relaunch #EmptyEsky series with new trips

Travel Weekly’s esky is usually full of beers. However, we’d happily drink them all to be ready for these new trips.

Share

CommentComments

Events

“So disappointing”: Bali-themed festival forced to apologise, issue refunds and offer free entry

Organisers of a festival aiming to quench the thirst of Aussies who would rather be in Bali right now appear to have missed the mark by quite a bit.

Share

CommentComments

Tourism

ScoMo “in no hurry” to reopen Australia’s international borders

It appears the likelihood of more travel bubbles being announced soon is about the same as ScoMo’s beloved Sharkies winning the NRL Premiership this year … not good.

Share

CommentComments

Destinations

YIPPEE! Two-way trans-Tasman bubble finally kicks off

Today is the day, folks! As of midnight last night, the two-way trans-Tasman bubble is FINALLY open! Get the lowdown on NZ flights and tour discounts right here.

Share

CommentComments

Technology

“Do not trust the GPS”: Google Maps places rural town 85km north of its actual location

According to the mayors of a handful of rural Aussie towns, this isn’t the first time the popular travel app has caused problems for them.

Share

CommentComments

Travel Agents

“We call it the triple win”: Global Work & Travel launches new affiliate program

Have you been searching for ways to earn some much-needed moolah ever since JobKeeper ended? Here’s one that doesn’t involve busking on the street or spinning signs.

Share

CommentComments

Cruise

CLIA to welcome 18 new ships with virtual showcase

The association is bringing you all the latest vessel news from the maritime world with this exclusive showcase.

Share

CommentComments

Hotels

GM appointed to lead Best Western’s newest Aussie hotel

Australia’s newest luxe boutique hotel has named its GM who, according to the accompanying press photo, has a strong beard game.

Share

CommentComments