One of the worst performers on the Australian share market on Tuesday was the Apollo Tourism & Leisure Ltd (ASX: ATL) share price.
The shares of the vertically integrated manufacturer, rental fleet operator, wholesaler and retailer of recreational vehicles (RVs) sank 18% to 30 cents.
This means the Apollo Tourism & Leisure share price has now wiped out all its 2021 gains.
Why did the Apollo Tourism & Leisure share price sink lower?
Investors were heading to the exits in their droves on Tuesday following the release of a disappointing half year result.
According to the release, for the six months ended 31 December, the company reported an 18.8% decline in revenue to $160.2 million.
Management advised that COVID-19 materially impacted its rental operations during the half, with Government-imposed lockdowns and travel restrictions occurring in each region.
Furthermore, although the company’s focus on domestic markets has resulted in a notable increase in domestic guest revenue, ongoing lockdowns and snap border closures continue to disrupt domestic consumer confidence.
In respect to earnings, Apollo Tourism & Leisure reported a loss before interest and tax of $4.9 million and a net loss after tax of $7.5 million. This compares to $24.9 million and $11.3 million, respectively, a year earlier.
Apollo’s CEO and Managing Director, Luke Trouchet, commented: “The global tourism industry continues to be impacted by COVID-19 and its associated government-imposed travel restrictions. While we have seen some recovery through increased domestic activity, the ongoing closure of international borders and snap lockdown or border closure decisions domestically, have created a challenging landscape for the business.”
Nevertheless, Mr Trouchet appears cautiously optimistic on the future.
He explained: “However, we recognise that while the timing of the journey to recovery may be uncertain, the global vaccine roll-out and gradual decline in global COVID-19 cases is extremely positive. We have continued to implement our COVID-response plan initiatives, including reducing our operating cost base and investing in technology to adapt to the ever-changing environment in which we operate. I believe Apollo is in a strong position to thrive when tourism activity recovers.”
Unsurprisingly, due to the ongoing uncertainty of the current trading environment, Apollo was not in a position to provide earnings guidance for FY 2021.