The Bank maintains its target for Transat shares at $3.75. It was trading at $4.13 yesterday when the markets closed. (Photo: 123RF)
Revenues on the rise and first profits since the pandemic. Transat presented this morning the results for its third quarter of 2023, which contrast with those of last year at the same period.
Thus, for the months of June, July and August, Transat posted revenues of $746.3 million, or $238 million more than for the corresponding period last year. This is an increase of 47%.
The Quebec company’s profits stand at $57M, at $1.49 per share, compared to a loss of $106M ($2.82 per share) at the same date last year. A significant recovery also marks the operating result which ends the year with a surplus of $64.4M, light years from the operating loss of $93.2M for the third quarter of 2022.
“These results demonstrate our overall quality of execution and our ability to meet sustained customer demand in a cost-effective manner. Third quarter revenue of $746.3M was 6.8% higher than 2019 levels, despite a 14% decline in capacity, and our record adjusted EBITDA of $114.8M increased nearly 85% . Strong demand for leisure travel generated returns 29% higher than those of 2019,” said Annick Guérard, President and CEO of Transat in a press release released Thursday morning.
After the significant turbulence of the pandemic period, demand appears to be solid among travelers. Deposits for upcoming trips totaled $819.9M, an increase of 34% compared to the end of July 2019, and 40% compared to the third quarter of 2022.
The announced sale of land worth $50M in Mexico will go towards debt reduction, the company also announced. At $1.5 billion, this remains a source of concern.
“Record customer deposits for a third quarter demonstrate the resilience of demand, which should allow Transat to further improve its financial situation,” commented Patrick Bui, Chief Financial Officer of Transat.
“The solid third quarter results and positive outlook for Transat are encouraging. We continue to see Transat show improvement in its margins and liquidity. That said, we continue to remain cautious regarding the value of the stock,” commented National Bank analyst Cameron Doerksen.
The Bank maintains its target for Transat shares at $3.75. It was trading at $4.13 yesterday when the markets closed.
A call with analysts will take place this morning at 10 a.m.
An exclusive interview with the Chief Financial Officer of Transat, Patrick Bui, will also be available on the Transat website. Deals shortly.
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