COVID holiday from hell continues for Helloworld

COVID holiday from hell continues for Helloworld

Travel group Helloworld (ASX: HLO) is set to dip into its cash reserves to ride out what has been a 2020 COVID-19 horror story.

The company's September quarter trading update was an angry sea of red with an EBITDA loss of $4.1 million.

However, Helloworld said at the end of the quarter it had total free cash of $105 million and, judging from current estimates said it had sufficient liquidity to trade into 2022.

With borders closed and grounded planes essentially curtailing Helloworld's business model, the company has seen revenue plummet by 86.8 per cent to $12.4 million.

As Helloworld CEO and managing director Andrew Burnes (pictured) said in September when the company announced a $69.9 million annual loss, 2020 has been a 'perfect storm' for the company.

In a statement that encapsulates the effect of the pandemic shutdown on the tourism industry, it's telling that an EBITDA loss of $800,000 in September was a highlight, showing a marked fall from July and August which both accounted for losses of about $1.6 million.

Total transaction volume, based on unaudited management accounts, was $176.8 million, down 90.6 per cent on the same period last year.

Total incoming international air arrivals decreased by 98 per cent between 1 March and 25 October, and outbound numbers decreased by 97.7 per cent over the same period.

However, despite the raw red ink of the results, Helloworld signalled an intent to trade on in anticipation of happier days.

The company prepaid $20 million of its bank debt on 23 October, reducing free cash to circa $85 million and increasing its undrawn debt headroom by the amount of the prepayment to about $29 million.

The tourism operator also said its cruise sales for September were up 107 per cent, mainly driven by demand for a round-the-world cruise departing Sydney in May 2022. 

It tipped a return to break-even or better conditions in the fourth quarter of the FY21, allowing for a reopening of interstate borders and resumption, even if limited, of international travel.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

Go1 founders win Brisbane Young Entrepreneur of the Year Award after decade-long wait

Go1 founders win Brisbane Young Entrepreneur of the Year Award after decade-long wait

After their business became a unicorn amidst the ongoing expansion ...

Cardno shareholders to get a cut from $667m sale of international divisions

Cardno shareholders to get a cut from $667m sale of international divisions

Engineering and consulting group Cardno (ASX: CDD) has sold its US ...

Pacific Fair sale puts the spotlight on buyers for Dexus’ minority stake

Pacific Fair sale puts the spotlight on buyers for Dexus’ minority stake

The Gold Coast’s Pacific Fair shopping centre, fresh from pla...

Victoria opening to vaccinated international arrivals from 1 November

Victoria opening to vaccinated international arrivals from 1 November

With lockdown lifting today in Victoria the state’s governmen...