The Corporate Travel Management Ltd (ASX: CTD) share price is in focus this morning following the release of the company's financial year 2022 earnings.
The corporate travel specialist's stock closed yesterday's session at $21.46.
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Corporate Travel Management share price on watch
Here are the key takeaways from the S&P/ASX 200 Index (ASX: XJO) travel company's year ended 30 June:
- Total revenue came to $388.7 million – 94% higher than that of the prior corresponding period (pcp)
- Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $59.8 million – up from a $7.2 million loss
- Net profit after tax (NPAT) came to $3.1 million – up from a $55.4 million loss
- Underlying NPAT reached $17.5 million, coming to fruition in the final quarter
- Total transaction value (TTV) reached $5.1 billion – a 215% improvement
- Revealed a 5 cent per share unfranked dividend – its first post-pandemic payout
Corporate Travel Management reported a profit, albeit a slight one, for financial year 2022.
Indeed, it's been profitable at an EBITDA level since early 2021. But it was the June quarter that really lifted its bottom line.
The company posted an underlying NPAT of $20.5 million for the quarter ended 30 June. It also boasted $1.8 billion of TTV, $141 million of revenue, and $35.7 million of underlying EBITDA in the final quarter.
It ended financial year 2022 with no debt, $127 million of cash, and strong operating cash flows. It also intends to pay out 50% of NPAT in dividends going forward.
What else happened in FY22?
The major news from Corporate Travel Management in financial year 2022 was of its acquisition of Helloworld Travel Ltd (ASX: HLO)'s corporate and entertainment travel businesses.
The ASX 200 company underwent a $100 million capital raise to fund the purchase. Under the raise, Corporate Travel Management offered new shares priced at $21 apiece.
It also battled border closures brought about by the spread of COVID-19 variants last financial year.
What did management say?
Corporate Travel Management managing director Jamie Pherous commented on the company's earnings, saying:
Following the removal of most border and travel restrictions globally, the fourth quarter momentum makes us optimistic for the future, and we are pleased that the business has successfully translated that momentum into earnings.
Corporate Travel Management is a different business than it was prior to the COVID-19 pandemic. We are larger, more diverse, and more relevant to our market globally. This gives us an exciting platform from which to continue our organic growth trajectory in financial year 2023 and beyond.
What's next?
Corporate Travel Management expects to fully recover from the pandemic in financial year 2024, in line with International Air Transport Association forecasts.
That could see it posting $810 million revenue and $265 million of underlying EBITDA, based on pro forma figures.
However, such a recovery isn't likely to be linear in financial year 2023 due to capacity constraints and travel restrictions in Greater China, both of which are expected to be resolved this fiscal year.
Finally, it noted forward bookings for September are strong in North America and Europe. Meanwhile, TTV is already at pre-pandemic levels in Australia and New Zealand. Finally, a reduction in Hong Kong's quarantine period from seven to three days brought an increase in activity earlier this month.
Corporate Travel Management share price snapshot
The Corporate Travel Management share price has been performing in line with the broader market in 2022.
It's dumped 7% year to date, as has the ASX 200.
Though, the stock is trading 1% higher than it was this time last year, while the index has slipped 5% over the last 12 months.
