Travel restrictions

Flight Center (ASX:FLT) earnings rebound as travel restrictions ease globally

Travel retailer, Flight Center Travel Group Limited (ASX:FLT), said it returned to EBITDA profit in March 2022. March 2022 went exceptionally well for Flight Center as its total transaction value (TTV) rose, it generated positive cash flow and maintained a strong liquidity position.

Flight Center reportedly said the removal or easing of travel restrictions in most places was the main driver of the company’s performance in March.

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Despite sharing the company’s performance recovery in March, shares of Flight Center were trading down 3.88% at A$21.82 as of 11:18 a.m. AEST with a market capitalization of A$4.53 billion.

Financial indicators for March 2022

Image source: © 2022 Kalkine Media®

The business travel manager scored A$8 million of underlying EBITDA in March 2022. Management added that its leisure business is progressing towards breakeven and its corporate business remains profitable.

In March, TTV nearly tripled from a year earlier and reached 59% of pre-Covid levels. Business activity rebounded to 76% of pre-Covid levels.

The international travel agency generated an operating cash inflow of A$2 million during the month. In December 2021, the company reported a negative net operating cash flow balance of A$39 million. Additionally, he managed to repay a UK loan of £115m (in British Pounds) as per the company’s plan. The company said it is well positioned to seize the opportunity given its improved outlook and strong cash position.

Image source: © Dorian2013z | Megapixl.com

How did the Flight Center corporate sector perform in March?

The corporate business was profitable on both the underlying EBITA and PBT fronts. Flight Center sees great upside potential in the United States as travel programs resume. The company’s market shares are increasing with the organic growth profile which includes multi-billion dollar account wins and high customer retention rate.

Flight Center said it will focus on the US and European market to register growth in profitability, where market share is growing rapidly. Additionally, the company will continue to invest in its product, people and brand.

How did the leisure activity perform in March?

The leisure business picked up momentum before the peak of the booking period in the fourth quarter. Flight Center informed that customers were queuing outside popular stores. Productivity has exceeded historical levels, so the company could hire additional consultants.

Most of the sales came from stores, but it should be mentioned here that contributions from online businesses, call centers and B2B are also increasing. In March 2022, flightcentre.com.au reported a record TTV. The rebound in international travel continues thanks to visits from friends and relatives.

Orientation & outlook

Flight Center reportedly said the TTV would likely be lower in April than March due to the extended holiday period. Leisure activity should rebound in the fourth quarter after reaching equilibrium in March.

The ASX-listed company expects an underlying EBITDA loss in the range of A$195 million to A$225 million for the full year 20222 and expects a strong cash generation.

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