Helloworld [ASX:HLO] Regains Profits on Returning Travel Demand

Today, online flights and accommodation booking platform Helloworld Travel [ASX:HLO] has announced an upswing in revenue and profit for the past six months as the travel industry makes its long-awaited return.

The travel group said it hit $1.21 billion in total transaction value — up 206% from the same time in 2021.

Statutory profit after tax came to $1.6 million, which is a huge improvement after losing $14 million last year.

HLO’s share price surged after the optimistic news, rising almost as high as 8% earlier on Monday morning at $2.20 a share.

HLO has boosted in share value by more than 10% in the week and 64% in the first two months of the new year.

Webjet [ASX:WEB], on the other hand, has been trending stronger for longer, causing it to rise by 14.5% over the ASX 200:

Source: tradingview.com

Helloworld’s surging TTV reopens doors for profit

With the travel industry gathering momentum in 2022, booking platforms like Webjet, Expedia, and Helloworld have seen a massive uptick in transaction volumes supporting the industry’s return to profit recovery.

Helloworld posted its latest financials for the six months ending 31 December 2022, touting a net profit of $1.4 million instead of the $14 million loss that struck the company the same six-month period a year before.

Total transaction values (TTV) were three-times that of the prior period, equating to $1.21 billion by the end of 2022.

HLO managed to come back on top in profit after pulling $73.1 million in revenue as opposed to the $29.1 million in the half year ending 31 December 2021, which was a significant 151% increase.

TTV in Australia went up from $347 million to $1 billion — a 194% crease on the prior period — while New Zealand also climbed to $177.8 million — increasing by 359%, and Fijian operations climbed 22.3-times higher than last year.

Underlying EBITDA (earnings before interest, tax, depreciation, and amortisation) came to $15.6 million, and the group said it now maintains a strong balance sheet with $3.5 million and no bank debt.

Helloworld has resultantly upped its EBITDA guidance to $28 0 32 million for the full 2023 financial year.

The group also announced declared dividends of 2 cents per share (fully franked) and expects to distribute these in March.

January TTV climbed 290% on the prior period, raking in $211.9 million for the new calendar year.

Across the industry, leisure air ticket volumes (domestic and international) in Australia and New Zealand averaged 65-75% of 2019 levels during 1H FY23.

From a TTV perspective, the lower volume has been offset by higher ticket pricing as inflation lends some benefits to elements of the industry.

HLO said flight availability is increasing and prices are expected to stabilise throughout 2023. As the industry continues its restoration to full capacity, and as more customers fulfil the urge to make up for time lost in lockdown, it will be interesting to see how 2023’s continued rising rates balance this.

Source: HLO

Regards,

Mahlia Stewart,

For Money Morning

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