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.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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