Webjet flags coronavirus bookings slowdown
Revenue at travel agency Webjet was up by 24 per cent for the first half of 2020 but the company has flagged coronavirus has stopped it from upgrading earnings guidance for the full year.
The online travel booker predicted coronavirus would have an impact on second half earnings of between $7 million to $15 million as its business accommodation bookings and tour packages were hit by booking slowdowns related to the virus.
Webjet chief executive John Guscic.
Speaking on a call unveiling half-year results on Wednesday morning, chief executive John Guscic said he expected the effects of the virus to be one-off but it would be difficult to place a final value on the impact given the vast majority of international airlines are not flying into the China.
"No matter what happens, the Chinese travel market will be non-existent over that period," he said.
Webjet reported statutory revenue of $217 million for the first half of the year. The company's underlying net profit after tax was up 44 per cent to $55.1 million.
Its business-to-business hotel booking platform WebBeds saw an 81 per cent increase in earnings before interest, tax, depreciation and amortisation to $57.3 million.
Its statutory net profit after tax was $9 million, however, once one-off costs including acquisition and amortisation costs and a write down of Thomas Cook bills were taken into account. That represented a 64 per cent drop on the prior corresponding period.
Webjet chief executive John Guscic said the company had successfully accelerated the WebBeds as the business continues its transition to an global online travel booking site.
However, the collapse of UK travel booked Thomas Cook forced the company to face significant unpaid bills.
"The key disappointment during the period was the collapse of Thomas Cook in September 2019," Mr Guscic said.
Webjet was owed $44 million from Thomas Cook at the time, but due to the compulsory liquidation of the business it was forced to write down those debts.
Webjet gave earnings guidance for the full year to place earnings before interest, tax, depreciation and amortisation at between $147 million and $165 million.
Webjet will pay a half-year dividend of 9c a share, to be paid on April 16.