Company says it broke even in first half of 2022, sees profit in fourth quarter>>
by: Harvey Chipkin
Flight Centre Travel Group amended its market guidance for the 2022 fiscal year (FY22) because of a faster-than-expected improvement in the travel landscape. The company now projects it will break even in the first half of 2022, while still experiencing an underlying EBIDTA (earnings before interest, depreciation, taxes and amortization) loss of between $180 million and $190 million for the 12 months ending June 30, 2022. The midpoint in this new range — an underlying $185 million EBIDTA loss — represents: • An 11.9% improvement on the midpoint in the company’s initial FY22 market guidance of an underlying loss between $195 million and $225 million; and • A material improvement on a $337.9 million FY21 underlying EBIDTA loss.
Demand accelerated, according to the company, after concerns about the Omicron strain abated and as governments globally relaxed or removed the restrictions that had grounded most nonessential travel since the start of the pandemic. With this acceleration, total transaction value (TTV) for FY22 topped $10 billion — more than two and a half times the $3.95 billion FY21 result — and, on a monthly basis, was tracking near or above pre-COVID levels in a number of businesses by year end. TTV recovery has, to date, been fueled by both an uplift in demand and higher than normal ticket prices linked to a lack of airline capacity, particularly on international routes. Graham Turner, managing director, said the scale of the recovery exceeded the company’s initial expectations and meant it should now exceed its preliminary FY22 result target, with early trading results pointing to a break-even second half result and a healthy fourth quarter profit.