Corporate Travel (ASX:CTD) more than doubles its revenue amid easing COVID-19 travel restrictions

Easing COVID-19 restrictions are boosting this ASX travel company.

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Key points

  • The Corporate Travel share price is up more than 5% on Wednesday after the company released its half-yearly results
  • Underlying EBITDA is up 219.7% on H1 FY21 
  • Revenue in North America is now higher than before COVID-19

The Corporate Travel Management Ltd (ASX: CTD) share price is up more than 5% today amid the company announcing a 120% jump in revenue and other income.

Corporate Travel released its half-year results this morning, spurring its share price to $23.97 at the time of writing, a 5.13% gain.

Let's take a look at what the travel company reported.

Corporate travel share price ascends amid half yearly results

Highlights of the company's half-year (H1 FY22) results include:

  • Total revenue and other income surged 120% on the previous corresponding period (PCP) to $163 million
  • Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $18.2 million, a 219.7% boost on the PCP. (In H1 FY22, underlying EBITDA was -$15.2 million)
  • Underlying net loss after tax of $0.4 million, compared to a loss of $26.6 million in the PCP
  • Total transaction value (TTV) of $2,083.1 million, a 416% boost on the PCP

What else happened in the half?

The COVID-19 Omicron variant cut down travel activity between November and January. However, Corporate Travel Management is expecting this to ramp up in areas where travel restrictions have been lifted.

The company is seeing a quick rebound in February in the United Kingdom and North America.

In the first half of 2022, the company invested in rebuilding staff levels in preparation for the travel recovery.

In North America, the company saw a 213% boost in revenue and other income to $92 million. Client wins are at the highest levels in the company's history in North America. These are at a greater rate than prior to the pandemic.

Revenue in Europe also jumped by 229% to $43.8 million. Australia and New Zealand was impacted by restrictions during the half, however, underlying EBITDA still finished in the green at $0.9 million. Domestic travel is bouncing back in the ANZ region.

Asia losses were "well contained" despite travel restrictions in most of the region in the first half of 2022.

Management comment

Commenting on the results, managing director Jamie Pherous said:

The strategic acquisitions we made during the pandemic have transformed CTM into a much larger business with greater exposure to the North America market which, along with the UK market, is rebounding sharply.

Revenue in North America is now above pre-CTM COVID levels shows, pointing to the potential of the business when the travel market fully recovers. Strategic M&A has made North America our largest region and integration execution is well advanced.

Because of our expanded global footprint and strong financial position, we are targeting EBITDA of $265m in full recovery compared with $150m pre-pandemic

What's next

Corporate Travel Management expects to complete the acquisition of Helloworld Corporate in the third quarter of 2022, subject to regulatory and contractual approvals.

The company didn't offer a guidance for FY22 due to short term uncertainties. However, the company believes underlying EBITDA will build in February and March.

When the market fully recovers, Corporate Travel Management estimates it can achieve an underlying EBITDA of $265 million and revenue of $810 million.

Corporate Travel share price summary

The Corporate Travel share price has surged 32% in the past year and more than 8% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.

Corporate Travel has a market capitalisation of roughly $3.4 billion based on today's share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management Limited. 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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