Webjet reveals “devastating” COVID-19 damage to full-year results

After a profitable first half of FY20, Webjet has swung to a big full-year loss, mainly due to COVID-19’s havoc-wreaking ways.

The ASX-listed online travel company posted a net loss of $143.6 million in the 12 months to 30 June, following a $9 million profit in the first six months.

Total earnings swung from $123.1 million in FY19 to a loss of $91.3 million in FY20, while revenue fell by 27 per cent to $266.1 million, and total transaction value sunk by 21 per cent to $3 billion.

Earnings for WebBeds slid 78 per cent to $15.3 million, Webjet OTA suffered a 63 per cent earnings drop to $22.6 million, and Online Republic’s earnings plummeted by 87 per cent to $1.7 million.

Webjet managing director John Guscic said the company was on track for a decent FY20 result, particularly for the WebBeds business, until coronavirus hit.

“The arrival of COVID-19 had a devastating impact on the global travel industry, including Webjet, in the second half of the year as government-imposed travel restrictions and closed borders,” he said.

“Faced with a significant fall in bookings and nominal revenues in all our businesses, we focused on what we could control. We materially reduced our costs and fortified our balance sheet.”

Guscic said Webjet was starting FY21 in a strong capital position that offers “significant” financial and strategic flexibility.

“On a pro forma basis, we have $320 million in available cash, $420 million in total liquidity and more than two years to refinance the company’s remaining term debt, leaving us well-equipped to survive an extended period of traveller uncertainty,” he said.