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- Helloworld Travel (HLO) has joined in the travel group trend and has withdrawn its earnings guidance for the financial year 2020, due to the coronavirus
- Just last month, Helloworld released its half-yearly results and said it expected its EBITDA to be in the lower end of the guidance range
- However, since that time the coronavirus has spread into Europe and North America
- This has made Italy close its borders and major airlines reduce international capacity
- Domestic travel has held up the market so far, and Helloworld has seen an increased demand for domestic leisure travel
- However, it has warned this might not be enough to offset weak international travel rates
- Helloworld is down 1.98 per cent on the market today and is selling shares for $2.24 apiece
Helloworld Travel (HLO) has joined in the travel group trend and has withdrawn its earnings guidance for the financial year 2020, due to the coronavirus.
Just last month, Helloworld released its half-yearly results and said it expected its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to be in the lower end of the guidance range.
However, since that time the coronavirus has spread into Europe and North America over the past two weeks, as well as the spread through Asia continued. This has made Italy close its borders and cruises have been warned against.
Yesterday morning, the Department of Foreign Affairs and Trade (DFAT) that Australians should reconsider taking overseas cruisers.
“Australians, particularly those with underlying health concerns should reconsider taking an overseas cruise at this time due to COVID-19. If in doubt, consult a medical professional before travelling,” DFAT said.
This followed similar advice from the U.S. State Department yesterday.
Over the past two weeks, Qantas, Air New Zealand, Singapore Airlines, British Airways and Lufthansa, amongst others, have reduced international capacity for the next six months.
However, domestic travel has held up the market so far and Helloworld has seen an increased demand for domestic leisure travel but it has warned this might not be enough to offset the weak international travel.
“Which is a welcome sign given the negative impacts of the bushfires and of coronavirus on inbound visitor arrivals,” the company told the market.
CEO Andrew Burnes says Helloworld is a strong business with a solid balance sheet, low debt levels and a mix of business, some of which are being impacted and some of which are not.
“We’re in a good position to see this through but like so many businesses in tourism and other industries we need to take steps to right-size our operations for the journey ahead,” he said.
“Who knows how long this will go on but it will eventually get better and the world will recover and we want to ensure we are well-positioned when that happens to meet the leisure and corporate travel demands of our customers in Australia, New Zealand and around the world,” he added.
Travel agents from Helloworld’s six Australian and four New Zealand networks will be contacting all customers impacted by the changing airlines, cruise companies and other providers.
Helloworld is down 1.98 per cent on the market today and is selling shares for $2.24 apiece at 1:45 pm AEDT.
