Helloworld Travel Limited (HLO) has released its results for the financial year ended 30 June 2020, reporting a loss after tax of $70 million due to what the company says has been ‘the perfect storm’.
With international and state borders closing and a virtual shut down of the global travel industry since March due to COVID-19, HLO says they have confronted the perfect storm and taken the full impact.
However, while the company reported a $70 million loss before tax to the ASX, HLO says they have responded quickly to the events of the last six months and have been able to reduce monthly net operating cash outflows to almost $2 million from April 2020 onwards.
The company says it has carefully managed its expenses since and worked tirelessly to process cancellations and return monies and/or travel credits to clients both via agencies and directly from suppliers around the world.
To date, Helloworld has paid out full or partial refunds of over $800 million from their corporate, wholesale and ticketing businesses in Australia and New Zealand, with ticket refund turnarounds down to under seven weeks and wholesale and cruise refunds now under control.
HLO also successfully completed a $50 million cash-raising in July 2020 to help manage the financial challenges of COVID-19 and the travel restrictions imposed to slow the virus’ spread.
Helloworld Travel Limited’s brand portfolio of brands includes Helloworld Travel Limited, Helloworld for Business, Mobile Travel Agents (MTA), Magellan Travel, My Travel Group and Travel Brokers as well as Viva Holidays, Sunlover, Ready Rooms and Territory Discoveries.
This year’s combined Helloworld Travel Limited’s result is in stark comparison to last years $50.8 million profit before tax.
Looking ahead…
Helloworld says the last six months have been the most challenging time for travel in the modern era, noting ‘no other event has even come close to wreaking the havoc that COVID-19 has had on our global aviation, supply and distribution businesses.’
Despite the ongoing crisis, HLO says their corporate business in Australia and New Zealand has shown some signs of recovery in the last three months, generating 30% of previous years turnover in July 2020 which is expected to increase from October as State borders open again.
“This has been the most challenging period in our company’s history and we are working, like every other business around the world, to manage the responses to this crisis so we can be there when the world starts to emerge from COVID-19 and starts travelling again.”
Andrew Burnes, HLO CEO & Managing Director
Within its leisure operations, HLO says revenue generation has been much slower although they are seeing some income from intra-state travel, particularly in WA, Queensland and New South Wales and, for a short period, interstate travel, particularly when the Queensland border was open.
The company says their focus remains on the travel agents in their six networks in Australia and four networks in New Zealand and 1,200+ personnel in Australia, New Zealand, Fiji and India.
With overheads at around $5 million per month (an 80% reduction on previous levels), strong liquidity and a significantly lower cost base across their key business operations, HLO says they are confident that they can continue to adapt the business to the circumstances that confront us, ride out this “perfect storm” and take advantage of opportunities as they arise and emerge in a very strong position.
Looking ahead, Helloworld Travel CEO & Managing Director Andrew Burnes said:
“I believe that travel experiences will be even more treasured when this has ended. People will not hesitate to go and see and do the things they have always wanted to do in the newfound knowledge that circumstances can change very rapidly.”
“We are confident that when they can travel, our customers will need the help of their travel professional more than ever.”
Andrew Burnes, HLO CEO & Managing Director
“We’ve been providing professional travel services to our customers for over 60 years. And we will be there on the other side of this for our customers for the next 60 years and beyond.” He said.
Read the full report submitted to the ASX here.
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