The Webjet Limited (ASX: WEB) share price is falling after investors got a look at the FY21 result for the nine months to 31 March 2021.
Webjet’s FY21 numbers
The ASX travel business compared its FY21 (nine months), compared to the 12 months of FY20.
Webjet’s total transaction value (TTV) for the nine months was $453 million, down from $3 billion in FY20. Revenue generated in FY21 was $38.5 million, down from $266.1 million.
However, expenses more than halved from $356.2 million to $163.8 million.
Half of FY20 wasn’t impacted by COVID-19. That’s why it was able to make $27.6 million of underlying EBITDA (EBITDA explained) in FY20, but Webjet saw an EBITDA loss of $56.3 million in FY21.
The underlying net loss was $88.8 million, compared to a loss of $42.3 million in FY20. The statutory net loss in FY21 was $156.6 million, compared to a loss of $143.6 million in FY20.
What drove these numbers?
Clearly the overall picture is still difficult because of COVID-19 impacts on the global travel industry. However, the business is working hard in its different business units to deliver 20% lower costs across the business once it returns to scale.
Webjet’s online travel agency (OTA) profitability continues to improve. Management said this underscores its strength as the number one OTA and the scalability of the business model. Its market share continues to increase. The OTA EBITDA margin is now back above 30%.
WebBeds is committed to emerge from COVID-19 as the number one global business to business provider and take advantage of new revenue opportunities. When at scales, it wants to achieve an EBITDA margin of 62.5%.
Summary thoughts on the Webjet share price
Webjet’s balance sheet continues to remain strong, with a ‘pro forma’ cash on hand of $431 million. All term debt maturity has been extended to November 2023.
The travel business reported that as markets reopen, its segments are rebounding quickly. As at April 2021, its OTA Australian domestic bookings were 95% of April 2019 levels. WebBeds USA TTV was at 83% of April 2019 levels and Online Republic bookings were 48% of April 2019 levels.
Management believe that there is strong pent-up demand for travel, particularly leisure travel.
Whilst Australian international travel still seems some way off, domestic travel and global markets are seeing a recovery. I think Webjet shares could be a medium term opportunity, but the recovery won’t be a straight line, or simple.
