Economic headwinds are yet to bite the international travel market, according to online booking platform Webjet (ASX: WEB) which this morning reported a tenfold increase in bottom-line profit for the first half to $47 million.
Webjet has revealed that bookings, total transaction value (TTV), revenue and underlying earnings for the six months to the end of September are all materially ahead of the same time last year, despite ongoing capacity constraints in air travel.
While the latest bottom-line profit, up 1,083 per cent from a year ago, benefitted from a significant drop in depreciation of the company’s booking platforms, Webjet’s underlying EBITDA of $102.1 million is up 41 per cent amid robust conditions across the group’s businesses, particularly WebBeds, the company’s global online marketplace for the travel trade.
The latest result was delivered on a 35 per cent increase in TTV to $2.89 billion and a 39 per cent increase in revenue to $244.5 million.
Revenue margins also rose 23.2 basis points to 8.4 per cent which helped offset a 39 per cent increase in group expenses.
Webjet says its WebBeds bookings, TTV, revenue and EBITDA are now all ahead of pre-pandemic levels, which CEO John Guscic says reflects ‘the transformation work we undertook when the pandemic hit to capture growth as travel returned’.
“We’ve broadened our distribution base, expanded our global presence and introduced new product innovations,” Guscic says.
“As a result, we are now selling more product to more customers in more geographies, all while being more efficient and delivering best-in-class EBITDA margins.
“We continue to see incredible opportunities for WebBeds and have set the foundations to capture growth by investing ahead of the curve to ensure we are able to effectively scale going forward.
“We will continue to invest in attractive opportunities and innovation in order to maximise the value of our relationships with both our supply and demand partners.”
Guscic is forecasting continued growth for Webjet for the remainder of FY24 despite emerging economic headwinds.
“The global economy remains uncertain but global demand for travel remains resilient and notwithstanding the current geo-political issues, we expect FY24 EBITDA to significantly exceed pre-pandemic levels,” he says.
“We expect FY24 EBITDA to be between $180 million and $190 million – 14 per cent to 20 per cent ahead of CY19 (pre-pandemic) levels.”
Webjet’s confidence in the six months ahead has been supported by strong growth in international bookings through its Webjet OTA business with the increase only held back by capacity constraints.
Webjet OTA’s international flights market share grew 24 per cent compared to the same time last year.
“Hotel bookings in the period were around 50 per cent higher than pre-pandemic levels,” Guscic says.
“Our continued focus on cost efficiencies resulted in EBITDA margins getting back to pre-pandemic levels.
“The market continues to be impacted by airline capacity constraints but we see ongoing growth opportunities as capacity returns to 2019 levels.”
Webjet says it plans to focus on acquisitions to improve site traffic to combat capacity and pricing constraints faced by the industry.
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