Transat Reports Second Quarter Adjusted Net Loss of $103 Million on 98.7 Percent Revenue Decline
Transat has reported a fiscal second quarter adjusted net loss of $103 million or ($2.74) per share on a year-over-year revenue decline of 98.7 percent to $7.6 million. At April 30, 2021, the company had cash and equivalents totaling $346 million.
On Thursday (June 10, 2021), Transat A.T., Inc. reported their fiscal second quarter results for the period ending April 30, 2021. For the second quarter, the integrated tourism company reported an adjusted net loss of $103 million or ($2.74) per share on a year-over-year decline in revenue of 98.7 percent to $7.6 million. Transat’s airline operations have been suspended since January 29, 2021 and the company plans to partially restart operations starting July 30, 2021. Transat ended the fiscal second quarter with $346 million in cash and equivalents, and has entered an agreement with the Government of Canada to borrow up to $700 million, of which $310 million is earmarked for customer refunds. Additionally, Transat has extended the maturities on existing drawn credit facilities through April 29, 2023. In total, the company can access up to $820 million in financing, with $220 million drawn as of April 30, 2021.
In Thursday’s announcement, Transat A.T. Inc.’s President and Chief Executive Officer, Annick Guérard, said,
“Following a quarter without revenues, progress made on vaccinations allows us to plan for a gradual resumption starting July 30. We hope that a safe travel recovery plan can be deployed as soon as possible and will lead to a lifting of restrictions in the near future. All indications are that our customers are eager to make use of some of their savings from recent months to travel. We're excited about welcoming them back soon.
“The financing we secured will allow us to roll out our plan over the coming years. Our strong brand, our employees' commitment and the transformation we have undertaken, and which will continue over the coming years will allow us to position ourselves again as our customers' favourite leisure travel company and become more profitable than before the pandemic.”
During the second quarter, Transat returned two Airbus A330s and one Boeing 737-800 to the lessors early. At April 30, 2021, the company held customer deposits for future travel totaling $560.4 million, a decrease from $605.1 million during the same period last year. Transat ended the second quarter with a working capital ratio of 0.85 versus 0.99 at April 30, 2020, attributable to low business volume over the past year. As part of the company’s new strategic plan and restructuring, Transat’s Board of Directors approved the discontinuation of the company’s hotel division operations on May 20, 2021.
Based in Montreal, Transat A.T. Inc. (TSX: TRZ) has 5,000 employees and is the third largest airline in Canada, and leading integrated tourism company specializing in holiday travel. The company offers vacation packages, hotel accommodations and air service to more than 60 destinations in over 25 countries in the Americas and Europe. Air Transat has been named ‘World’s Best Leisure Airline’ at the Skytrax World Airline Awards.
Source: Air Transat