Transat's profit declines in 4Q, posts record net income in full-year
Published: 17 Dec 2007
Earnings for the quarter ended October 31 amounted to 23 cents a share, compared with 39 cents per share a year ago, shared the Montreal-based company. Excluding the impact of certain non-cash, non-operating items, net income would have been $10.4 million or 31 cents per share.
The results included an $11.2-million writedown on ABCP securities, a $3.9-million writedown of goodwill related to an investment in Travel Superstore Inc., an Ontario-based travel agency business, and a $13.6-million gain on derivative financial instruments related to fuel contracts. ABCP securities, or short-term corporate loans, are entangled in the global credit crunch traced back to the collapse of the U.S. subprime mortgage market.
For the fourth quarter, the Corporation posted revenues of $680.4 million, up $60.9 million, or 9.8%, from $619.5 million for the corresponding period of 2006. The increase is mainly attributable to growth in revenues of the Canadian tour operators and growth in France related to organic growth at Look
Voyages and the acquisition of Amplitude Internationale in July 2007.
In November 2007, Transat A.T. entered into an agreement with a Canadian chartered bank to provide a five-year, $150 million unsecured revolving credit facility and a five-year $60 million secured revolving letter of credit facility. The funds are earmarked for acquisitions and general corporate
purposes.
The company posted revenues of $3.0 billion for the year ended October 31, 2007, compared
to $2.6 billion in 2006 - an increase of 17%.
It recorded a margin of $133.1 million, up 4.8% from $126.9 million in 2006.
Transat posted record net income of $80.5 million or $2.36 per share on a diluted basis ($74.5 million or $2.18 per share on a diluted basis after the provision on ABCP securities, a write-down of goodwill and the favourable impact of new hedge accounting standards), compared to $65.8 million ($1.85 per share, fully
diluted) in 2006 (Transat had posted earnings of $72.3 million in 2004).
"Fiscal 2007 was a great year for Transat," said Jean-Marc Eustache, President and Chief Executive Officer, Transat A.T. Inc. "Our efforts in Ontario have born fruit and we are now the number one distributor of winter sun packages all across Canada; in France, Look Voyages has recorded stellar
results and we acquired Amplitude Internationale, thus reinforcing our position as one of the largest tour operators in the country; and despite very high fuel costs and fierce competition, especially between Canada and the UK, we are posting a record income."
The 17% overall increase in revenues is the result of a 10.6% growth in revenues from North America, bolstered by a 41.1% growth in revenues from European operations. The year-over-year increase in the number of travellers, which stood at 14.4%, is one of the main factors behind the increase in revenues: it stems from a 6.7% jump in the number of travellers in North America, along with a 52.0% increase in Europe.
Comments
You must be logged in to post comments.