Helloworld adjusts outlook on virus fears
Australian travel business Helloworld Travel saw net profit grow 4.1 per cent in the first half of FY20 to $22.7 million, but has warned the second half of the year will be impacted by fears of coronavirus.
For the six months to 31 December, the business saw record total transaction value and revenue up 12.9 per cent to $3.6 billion and 9.8 per cent to $200 million, respectively.
The travel retailer’s Australian business generated $3 billion of total transaction value during the half, leading to an underlying EBITDA of $42.3 million, up 14.4 per cent on the prior corresponding period.
This was largely driven by the completion of its acquisition of TravelEdge Group to expand Helloworld’s corporate travel division, as well as customer growth at travel management service QBT.
In New Zealand, EBITDA grew 15.5 per cent to $6 million, off of a 14.2 per cent growth in revenue to $32.3 million due to increased retail volumes.
The second half, however, will likely appear quite different. Helloworld expects its retail leisure, wholesale leisure and corporate business to be impacted by international and domestic concerns around the spread of the COVID-19 virus, with minimal, if any, growth.
According to Helloworld, its inbound business from China accounts for 3 per cent of its total inbound business, which accounts for 3 per cent of its total TTV.
“We anticipate the net outcome to the business will be minimal TTV growth on a like for like basis for the remainder of FY20, with a further trading update to be provided in April,” Helloworld said in a statement.
Helloworld isn’t the first travel business to voice concerns about the virus moving forward, with Qantas cutting flights and sending staff on leave in anticipation of a $100 to $150 million impact to its profit in the second half.
Globally almost 78,000 people have been infected with the virus, with approximately 2,500 deaths.
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