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Travel giant Webjet’s shares soared as investors welcomed the company’s bullish half-yearly update, with the company saying its earnings will “materially” exceed pre-pandemic levels by the end of this financial year.
For the six months to September 30, the group swung to a net profit of $4 million, with revenue up more than 200 per cent to $175.8 million. Total transaction value for the period grew to $2.1 billion, a whopping 200 per cent increase on the prior corresponding half and 90 per cent of pre-pandemic transaction value.
Webjet boss John Guscic is bullish about the group’s financial year after a buoyant half-yearly update. Credit:Arsineh Houspian
Webjet’s managing director John Guscic exclaimed “we’re back, baby” to open the update before announcing bookings exceeded pre-pandemic levels, recording 3.4 million in this half, one per cent more than at the same time in 2019.
With Webjet shares closing 10 per cent higher at $6.19 on Thursday, Guscic said he felt “vindicated” after a difficult two years for the business. The company now expects the second half of the year’s earnings to exceed pre-pandemic levels by at least $10 million.
“People needed the proof points that our strategy was working. Global bookings have exceeded 2019, so has the run rate. We’re back bigger and stronger, and our market share has outperformed the market by 30 to 40 per cent for months,” Guscic said.
Underlying earnings before interest tax, depreciation and amortisation – the metric most watched by investors – rose 60 per cent over the six months to $72.5 million, beating analyst expectations by 25 per cent. Webjet’s statutory profit was $4 million, up from a $60 million loss on the same period last year and its underlying profit grew to $38 million.
Guscic credited Webjet’s technological transformation for its rapid recovery, “we’re now delivering the right product at the right time for the right customer,” he said.
About 20 per cent of the market of Webjet’s accommodation arm, Webbeds, remains out of action due to the war in Ukraine, China’s travel ban and Japan’s slow return to international travel. However, Guscic maintains the current disruptions aren’t a point of concern for Webjet.
“Underlying market trajectory isn’t the key to our success. Looking at a single market is irrelevant because there’s such a big gap between market recovery and Webjet’s recovery.”