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Transat A.T.'s Second Quarter Results: Earnings per share up by 22% for the quarter
Transat A.T. (TRZ: Montréal and Toronto) reported net income of $7,553,000 ($0.22 per share) for the second quarter, compared with $6,111,000 ($0.18 per share) for the quarter ended April 30, 1998, an increase in earnings per share of slightly more than 22%. Revenues for the quarter rose to $451.4 million, or 22.4%, compared with $368.8 million a year ago.
"This revenue growth of approximately $82.6 million is attributable to both the Canadian and French markets,'' noted Jean-Marc Eustache, Chairman of the Board, President and Chief Executive Officer of Transat A.T. Inc. "In Canada, revenues were up by about 12% overall as a result of higher selling prices and volumes. Revenues of the French subsidiaries, increased by nearly 45% as a result of additional volumes stemming among others from the development of the cruise market, Look Voyages's Club Lookéa, as well as travel to the sunshine destinations offered by Vacances Air Transat (France). The strengthening of the French franc against the Canadian dollar also contributed to this growth,'' he added.
Results for the winter season, from November 1 to April 30, were particularly encouraging and are indicative of the Corporation's attractive positioning in its various markets.
"During this period, earnings per share leaped from $0.04 to $0.14,'' pointed out Mr. Eustache.``Various factors had a positive impact on profitability in the second quarter. In the Canadian market, the most noteworthy are higher selling prices, lower fuel costs, higher volumes in certain markets, better load factors and a drop in interest expenses. In France, Look Voyages's consolidated results are comparable to those of last year,'' explained Mr. Eustache. Finally, the fluctuation of the French currency did not affect significantly the Corporation's results.
Despite the many factors that had a positive impact, there were some which impacted negatively on the results. In Canada, the most noteworthy are the weak Canadian dollar compared with its U.S. counterpart, more competition in certain markets, particularly the Toronto-Florida route and an increase in certain operating expenses. In France, there was pressure on Look Voyages's profit margins, mainly as a result of the launching of new products.
Activities during the six-month periodFor the six months ended April 30,1999, the Corporation recorded net income of $4,674.000 ($0.14 per share), compared with $1,250,000 ($0.04 per share) last year. During this period, revenues totalled $815 million, compared with $669 million a year ago, for an overall increase of $146 million, or 21.8.%.
The second semester of the fiscal year is very important for the Corporation. In the Canadian market, it is anticipated the conditions that prevail last year will continue with sustained competition for the European destinations, particularly for departures from western Canada. In France, Look Voyages offers an attractive range of products with its Club Lookéa and a large offer of air-only charters, and Vacances Air Transat (France) offers Canadian, U.S. and sunshine destinations.
Transat A.T. Inc., the leader in the Canadian travel and tourism industry, is a public corporation listed on the Montréal and Toronto Stock Exchanges. Through its subsidiaries and affiliates, it is involved in all aspects of the distribution of travel services and air transportation.
Its wholly-owned subsidiaries are: the airline Air Transat, tour operators Vacances Air Transat (Montréal, Québec City, Toronto, Vancouver and Fort Lauderdale), Vacances Air Transat (France), Nolitour (Montréal) and Regent Holidays (Toronto), as well as the Tourbec travel agency chain.
Transat A.T. holds interests in tour operators Look Voyages (98%), Brok'Air (39%) and World of Vacations (35%), in Consultour/Club Voyages, a travel agency franchise group (50%), as well as in Services Haycot (50%), an airport handling services company. Vacances Air Transat holds a 66.7% interest in the incoming tour operator DMC Transat and Look Voyages owns 49.6% of STAR Airlines.