Corporate Travel Management (ASX:CTD) Reaches Crucial Milestone, Expects Profitability in Q4

Summary

  • Corporate Travel Management is expecting recovery to accelerate further by June/July, owing to fast vaccination programs.
  • Financial recovery is continuing with increasing momentum.

Corporate Travel Management Limited (ASX: CTD) is returning to profit, expecting positive underlying EBITDA for 4Q FY21, the global leader in business travel management services unveiled in 21 April filing.

This update reflects the recovering phase of the Australian travel industry, which was among the hardest-hit sectors due to lockdowns and travel restrictions. The mandatory social distancing protocol has only added to the industry's woes, but now things seem to be moving towards the better.

Image source: © Kritchanut | Megapixl.com

Must Read: Australia-NZ resume quarantine-free travel even as COVID-19 lingers

How is CTD placed in the current scenario?

Corporate Travel Management Limited broke-even in March 2021. Now, the company is expecting a positive underlying EBITDA in Q4 FY21, led by Australia, New Zealand, UK and the EU regions of the business.

CTD is witnessing positive signs of recovery in the US. In Europe and the UK, despite lockdown restrictions, essential travel client wins continued, thereby contributing to the company's profitability.

CTD is registering robust demand in Australia and New Zealand. As of the week ended 17 April 2021, total client activity increased to 85% of the booking levels of the financial year 2019. New Zealand, which managed to handle the virus crisis better than others, continues to stand out with last week trading above 160% of FY19 booking levels.

Must Watch: Corporate Travel Management (ASX: CTD) under Spotlight, Know Why!

As of 31 March 2021, the company has net cash of around AUD 105 million with no debt and an undrawn line of credit of GBP100 million. CTD is well-placed for industry consolidation that may occur.

Image source: © Silverv | Megapixl.com

It is leveraged to recovery, with nearly 70% of pro-forma revenue in 2019 generated from the UK and the US, which are among the regions most advanced in vaccine rollouts. These western countries are vaccinating their population at the fastest pace, with all people above 18 years of age expected to be vaccinated by June or July.

Also check: Will COVID-19 Vaccination Bring Some Respite for the Australian Travel Sector?

How is CTD transforming in the post-COVID period?

The company finds itself more relevant in the complex post-COVID environment, thanks to its technology, expert service and ROI. Consequently, it continues to win notable new clients.

Corporate Travel Management has highlighted that it is expecting to become a much larger business post the pandemic. The acquisition of US-based Travel and Transport is advancing well. Owing to the transaction, its revenues are up by 64% and underlying EBITDA is up by 44% as compared to FY19 on a pro-forma basis.

CTD was trading upward by 1.675% to AUD 20.030 on 22 April 2021 (AEST 11:35 AM).

Meanwhile, some of the travel stocks that were trading higher included Qantas Airways Limited (ASX:QAN), Flight Centre Travel Group Limited (ASX:FLT) and Webjet Limited (ASX:WEB). While players like SeaLink Travel Group Limited (ASX:SLK) were trading in red.


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