open the borders to fuel the Australian rebound in the next semester
Corporate Travel, which bought Nebraska-based Travel & Transport in September of last year, said first-quarter revenue for that fiscal year reached $ 83 million. That compared to the $ 29 million recorded in the same period a year earlier, when COVID-19 restrictions took a heavy bite. It was also higher than the $ 74 million in the fourth quarter of last year.
Using its preferred measure of underlying earnings before interest, taxes, depreciation and amortization, which eliminates some costs including technology development, the company said it made $ 11 million in this first quarter. Despite higher revenues, this underlying EBITDA was down from last year’s fourth quarter result of $ 14 million.
The squeeze was linked to business travel, with more than 2,000 employees retaining newly hired staff and then being hit by temporary regional slowdowns. General Manager Jamie Pherous argued that it was important to have staff ready to meet demand because “we know service can really suffer if you don’t think about the future. [Customer] good will evaporates quickly.
Mr Pherous said the quarterly result was in line with internal forecasts and the first half was “on track”.
Daniel Seeney, director of QValue Research, said he is monitoring the benefits corporate travel will reap after cutting costs during COVID-19 and as markets recover.
He expected to see a “rapid normalization of profitability” in the second half of this fiscal year and “ongoing market share gains as business travel accounts and compliance requirements accelerate adoption and development. ‘acceptance of the value proposition surrounding the support of specialized agencies for travel and, in particular, international travel ”.
Mr Seeney also said Corporate Travel’s discussion of other potential acquisitions was positive, given that such buyouts could offer benefits of scale with accounts for global corporate clients.
At the AGM, Mr Pherous said the company, whose wave of acquisitions had previously been targeted by short sellers, was looking at global buyouts amid some rivals posting large losses. “In recovering foreign markets, many peers are heavily in debt,” he said.
Anecdotes about the bumpy quarterly environment also mirrored the experience of rival Flight Center Travel, Corporate Travel saying that rising infection rates from delta variants dulled business momentum in North America in August and September. Momentum has since returned, Pherous said.
“North America highlights the challenges of bringing a business back into a stop-start economy,” he said.
In Australia and New Zealand, the closures have left domestic markets largely closed. But the division remained marginally profitable due to the opening of internal markets in Queensland and Western Australia, Corporate Travel said.
The company expected vaccination rates and open borders to trigger a “rapid rebound” in the second half of the year, Pherous said.
Europe has been outperforming against a backdrop of rapid reopening, said Pherous. It had posted a record underlying profit even though revenues had only recovered to 80% of the pre-COVID-19 level.
He told investors that Europe and North America are the largest regions in the business travel industry and “are recovering the fastest.”
“These two regions are already fully open for domestic travel and will be fully open for international travel from November 8 without any quarantine obstacles,” he said, but Asia is expected to continue to lose money until greater China opens up to the region.
Business travel highlighted the first quarter as its weakest seasonal time due to summer vacations in the northern hemisphere.
The AGM proceeded without controversy, with proxy advisory firms Institutional Shareholder Services and Glass Lewis recommending all resolutions.