Webjet announced its financial results for the first half of FY21 on Wednesday. The travel business reported that the first half continues to reflect the impact of the COVID-19 pandemic on the global travel industry with all businesses reporting a significant fall in Total Transaction Value, Revenue and EBITDA compared to 1H20.
Significant declines across the key metrics saw TTV and Revenue fall 90% to $267 million and $23 million respectively. Profits also turned into losses with EBITDA declining 146% to a $40 million loss, while NPAT declined 240% to a $60 million loss.
The company's focus continues to be on managing cash burn and cost reduction initiatives, as well as leveraging domestic leisure market opportunities:
Given its strong focus on domestic leisure markets and ability to leverage a highly variable cost base, Webjet OTA returned to profitability during the period as domestic borders started to reopen.
Online Republic benefited from domestic leisure markets reopening in Australia and New Zealand, although key international markets continue to be impacted.
WebBeds saw improved TTV performance during the period however ongoing restrictions continue to impact travel activity in most regions. Transformation Strategy initiatives underway have delivered a step-change in the cost base, cementing WebBeds as the lowest cost global B2B provider.
Commenting on the result, Managing Director John Guscic said: “These results reflect the devastating impact COVID-19 continues to have on the global travel industry. We remain focused on maintaining our strong capital position. Cost savings initiated across all businesses helped reduce cash burn, while allowing us to return staff to full-time work.”
Webjet noted it is focused on capitalising on travel recovery. Domestic and leisure travel markets are expected to lead the industry recovery and the company’s global footprint and diverse customer base should allow for demand to be captured when and where borders reopen, while also leveraging the structural shift from offline to online. Trading for the rest of FY21 is expected to be in line with 1H21.
Given the uncertainties inherent in the current travel environment, Webjet did not provide earnings guidance for FY21 and did not declare an interim FY21 dividend. The company also deferred payment of its FY20 interim dividend payment, which was due to be paid on 16 April 2021. It will be reviewed again following 1H22 results later this year.