Transat A.T. Inc. - Results of First Quarter 2013

Improved Selling Prices Over Winter 2012

Revenues of $805.7 million, compared with $829.3 million in 2012.
Operating loss before amortization and depreciation1 of $21.0 million, compared with $31.8 million in 2012.
Net loss of $15.1 million, compared with $29.5 million en 2012.
Adjusted after-tax loss of $21.6 million, compared with $29.9 million in 2012.
MONTREAL, March 14, 2013 /CNW Telbec/ – Transat A.T. Inc., one of the largest integrated tourism companies in the world and Canada’s holiday travel leader, posted revenues of $805.7 million for the quarter ended January 31, 2013, compared with $829.3 million in 2012, a decrease of $23.6 million, or 2.8%. The Corporation recorded an operating loss before amortization and depreciation1 of $21.0 million, compared with $31.8 million in 2012 and a net loss of $15.1 million ($0.39 per share on a diluted basis), compared with $29.5 million ($0.77 per share on a diluted basis) in 2012. Before non-operating items, Transat reported an adjusted after-tax loss3 of $21.6 million in 2013 ($0.56 per share on a diluted basis), compared with $29.9 million ($0.79 per share on a diluted basis) in 2012.

“Changes brought to our organization over the last 18 months, as well as our decision to slightly reduced capacity, have contributed to the improvement of our results,” said Jean-Marc Eustache , President and Chief Executive Officer of Transat.

First Quarter Highlights

The Corporation posted revenues of $805.7 million, compared with $829.3 million in 2012, and an operating loss before amortization and depreciation1 of $21.0 million, compared with $31.8 million in 2012. The decrease in revenues is mainly attributable to the Corporation’s decision to reduce capacity on its markets (Sun, transatlantic and France), hence a 12.6% reduction in the number of travellers. On all markets, selling prices were higher than in 2012.

Revenues of North American business units, which are generated by sales in Canada and abroad, decreased by $10.1 million (1.4%) compared with the same period in 2012. For the quarter, the capacity on sun destinations was down 12% compared with 2012. Capacity on the transatlantic market was down 18%. North American business units recorded an operating loss before amortization and depreciation of $8.3 million, compared with $19.1 million in 2012. The improvement in margin is mainly attributable to higher selling prices during the quarter.

Revenues of European business units, which are generated by sales made in Europe and in Canada, decreased by $13.5 million (10.5%) over 2012, mainly due to a decision to reduce capacity. European operations generated an operating loss before amortization and depreciation of $12.7 million, similar to the previous year.

Financial Situation

As at January 31, 2013, compared to the same date in 2012, cash stood at $247.9 million, compared with $214.0 million; working capital ratio was 1.0 compared with 0.99 and deposits from customers for future travel were $592.0 million compared with $598.4 million. Off-balance-sheet agreements stood at $531.6 million as at January 31, 2013, the decrease since January 31, 2012 being due to payments made during the 12-month period.

Outlook for the second quarter

The Canadian sun destinations market accounts for a very significant portion of Transat’s business in the winter. For that market, Transat’s capacity in the second quarter is approximately 10% inferior than last year, load factors are inferior, selling prices are higher.

On the transatlantic market, on which it is low-season, capacity is 18% inferior to the previous year, load factors are similar and selling prices are higher.

In France, where it is also low-season, medium-haul bookings are similar to last year, and long-haul bookings are 7% inferior (based on the Corporation’s decision to reduce capacity). Selling prices are slightly higher on both market segments.

To the extent the aforementioned trends hold, Transat expects better results than last year for its second quarter.

On the transatlantic market, for the summer, Transat’s capacity is down by 11% compared with 2012. Load factors are similar and selling prices are higher. In France, compared with last year at the same date, bookings are slightly lower and selling prices are similar.