Flight Centre narrows loss but expects travel rebound
Flight Centre has reported an improved set of half year results, despite not delivering a profit, on the back of a rebound in global travel demand.
For the six months to December 31, Australia's top travel agency narrowed its statutory pre-tax loss to $18.3 million, a significant improvement on the $276.1 million loss announced a year earlier.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $95m, compared with a $184m loss a year ago.
The value of transactions handled by the company more than trebled to $9.89 billion.
Chief executive Graham Turner lauded the group's solid performance in an "improved, but not fully recovered, trading environment".
"The sales momentum that helped drive our recovery last year continued throughout the first half, with total transaction value and revenue both tripling compared to the previous corresponding period," he said.
"In both leisure and corporate, we are achieving our strategic objectives and laying foundations for more meaningful profit recovery in the future."
Flight Centre said all of its regions, apart from Asia, returned to profit in the first half.
Its corporate business delivered a record transaction value of $5 billion and is on track to top the previous annual high of $8.9b generated in 2018/19.
The leisure segment contributed 44 per cent of the group's transaction value.
"We are not currently seeing evidence that the recovery is slowing with the leisure business currently trading at post-COVID highs and corporate travel activity escalating after the traditional holiday period," Mr Turner said.
He expects further recovery in the second half and reiterated the group's target for underlying earnings between $250m and $280m for the full year.
That will be aided by seasonality and an improvement in airline capacity. Flight Centre expects international capacity to Australia will increase to 85 per cent of pre-COVID levels by June 30 as a number of key airlines, including Emirates, China Southern and Cathay Pacific, increase services.
The company did not declare any interim dividend, extending a dry run for shareholders.
Flight Centre shares dropped after the results, and were trading 1.7 per cent lower at $18.29 each at 1300 AEDT, in a weak Australian market.