Corporate Travel share price tumbles despite record earnings forecast

Is the future bright for this ASX 200 travel stock?

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Key points
  • The Corporate Travel share price is falling this morning, dumping 1.62% to trade at $16.97 
  • It comes despite the company revealing a $15.7 million profit for the first half, as well as $4.2 billion of TTV – a 102% year-on-year improvement
  • It now expects to post record financial year 2023 earnings with a full recovery in financial year 2024

The Corporate Travel Management Ltd (ASX: CTD) share price is in the red this morning on the release of the company's first-half earnings.

Right now, shares in the S&P/ASX 200 Index (ASX: XJO) travel services provider are down 1.62% at $16.97.

Here are the highlights of the company's earnings report:

Man sitting in a plane seat works on his laptop.

Image source: Getty Images

Corporate Travel share price falls despite 79% revenue jump

What else happened last half?

The Australia and New Zealand region delivered the highest EBITDA last half, bringing in $23.5 million – a 2,511% improvement.

Despite a deluge of poor airport experiences and scheduling mishaps in the North American aviation industry last half, the company recognised $16.6 million of underlying EBITDA – a 177% jump.

The Europe region, meanwhile, delivered $17 million of underlying earnings – down 19% after a record half in financial year 2022.

Finally, its market share of Asia grew last half, with the region bringing in $3.4 million of underlying EBITDA – up from a $2.6 million loss.

The company boasts more than 97% client retention.

What did management say?

Corporate Travel managing director Jamie Pherous commented on the news driving the company's share price today, saying:

It was pleasing to deliver a record TTV and revenue result in [the first half], noting this half included an additional $8.4 million charge for excess staff capacity held to be ready for a further expected [second half] recovery.

This is a one-off investment; thankfully, we are seeing strong momentum into [this half] through significant new clients transacting and activity recovery.

What's next?

The company is gearing up to post record earnings later this year and hasn't yet noticed any potential recessionary impacts.

It forecasts its underlying EBITDA to come in between $160 million and $180 million, while its underlying profit before tax is expected to reach $120 million to $140 million.

It expects Europe to contribute $2 billion of TTV this fiscal year, while China's reopening has been tipped to indirectly drive down international airfares.  

Looking further ahead, it anticipates a full recovery in financial year 2024 on the back of client wins and retention as well as large account wins that will start trading in the current half.

Corporate Travel share price snapshot

This year has been good to the Corporate Travel share price so far.

The stock has lifted 15% since the start of 2023. Meanwhile, the ASX 200 has jumped 7%.

Looking further back, however, the share has fallen 25% over the last 12 months while the index has risen 3%.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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