The SeaLink Travel Group Ltd (ASX: SLK) share price has avoided the market selloff and is charging higher on Wednesday.
In morning trade the travel company's shares are up 9% to $4.23 following its half year results release.
How did SeaLink perform in the first half?
For the six months ended December 31, SeaLink reported revenue of $132.9 million and an underlying net profit after tax of $13.6 million. This represents a 4.6% and 3.8% increase, respectively, over the prior corresponding period.
This allowed SeaLink to declare a 6.5 cents per share fully franked interim dividend in January. This will be paid at the end of March to shareholders that were registered on January 8.
What were the drivers of its growth?
The main driver of its growth was its Captain Cook Cruises businesses in New South Wales and Western Australia. It delivered a significant increase in EBITDA to $4.4 million thanks to cost reductions, profit improvement initiatives, and improved economic conditions in Western Australia.
This was supported by the SeaLink South Australia & Tasmania segment, which delivered a 9.4% increase in EBITDA despite lower revenues.
The Fraser Island segment acted as a drag on its earnings. It reported a 7.4% decline in EBITDA due partly to softer demand and lower visitor numbers.
Also weighing on its earnings was its SeaLink Queensland & Northern Territory segment. It reported a 17% decline in EBITDA during the half.
Outlook.
Management advised that the business environment is volatile due to the devastating bushfires across Australia and the coronavirus outbreak in China.
It advised: "We are monitoring the novel coronavirus situation very closely, and it is too early to evaluate the full impact on business performance as it will depend on how long the outbreak lasts and how wide it spreads. The full impact of both the bushfires and coronavirus is unknown, but it will have an impact for the year on the Tourism and Marine business."
Management has and will continue to take mitigating actions to offset the negatives across all parts of the business. But it notes that the recently acquired Transit Systems Group business is not impacted by either bushfires or coronavirus.
