The Webjet Limited (ASX: WEB) share price will be one to watch on Thursday following the release of its FY 2020 results after the market close.
How did Webjet perform in FY 2020?
It certainly was a difficult 12 months for the online travel agent due to the COVID-19 pandemic.
After delivering a record profit result in the first half, the pandemic led to a collapse in booking activity and revenue in the second.
This ultimately led to Webjet reporting a 27% decline in revenue to $266.1 million. This comprises first half revenue of $217.8 million and second half revenue of $48.3 million.
Things were unsurprisingly much worse for the company's earnings before interest, tax, depreciation and amortisation (EBITDA). On a statutory basis, Webjet posted an EBITDA loss of $91.3 million for the year. This was down 171% year on year and comprised positive EBITDA of $46.4 million in the first half and an EBITDA loss of $137.7 million in the second half.
This statutory result includes one-off items totalling $117.7 million. These include $40 million debtor write-offs, $14.6 million associated with the closure of Webjet Exclusives, and a $20 million impairment of intangibles from the closure of Online Republic Cruise.
On an underlying basis, which excludes the one-offs, Webjet's EBITDA fell 80% to $26.4 million. This comprises first half EBITDA of $86.3 million and a second half EBITDA loss of $59.9 million.
Finally, on the bottom line, Webjet recorded a statutory net loss after tax of $143.6 million and an underlying net loss after tax of $42.3 million.
Balance sheet.
Thanks to a combination of its equity raising and notes offering, Webjet finished the period with pro forma cash on hand of $320 million and pro forma liquidity of $420 million.
All being well, this will give Webjet sufficient liquidity to ride out the current crisis. Especially following its 50% reduction in average monthly operating expenses in comparison to the first half.
On its analysts call, management revealed that its cost base is now $11.6 million per month. Interestingly, from this the company believes it could support revenue of $250 million to $300 million before needing to rehire again.
FY 2021 outlook.
The company notes that after essential worker travel, domestic leisure markets are expected to be the first to open around the world. As a result, it feels all its businesses are well-placed to capture the pick-up in travel activity when it happens.
Webjet's managing director, John Guscic, commented: "Whilst it is impossible to predict the timing of market recoveries, travel is recognised as a fundamental driver of global society. Travel is aspirational and exciting and once markets re-open, we expect to see unprecedented airline, hotel and tourism offerings – it will be a time of rediscovering the world."
"Our B2C businesses are highly scalable and the strength of the Webjet OTA brand should enable it to thrive as domestic markets open up. Our strategic objective for the WebBeds business is to be the #1 global player and everything we are doing now is focused on ensuring we emerge in a stronger position and giving ourselves the greatest opportunity to achieve that goal," he added.
Mr Guscic concluded: "Our global footprint and reduced cost base provides a powerful platform from which we are determined to maximise to the sustainable benefit of our shareholders and stakeholders."
