Fourth quarter
• Revenues of $763.4 million, compared with $805.9 million in 2011.
• Margin1 of $52.9 million, compared with $23.5 million before restructuring charge in 2011.
• Net income of $16.6 million, compared with a net loss of $7.3 million in 2011.
• Adjusted after-tax income3 of $28.7 million, compared with $7.3 million in 2011.
• Restatement of 2011 financial statements and those of prior years.
Fiscal year ended October 31, 2012
• Revenues of $3.7 billion, up 1.6% over 2011.
• Margin1 of $17.0 million, compared with $33.0 million before restructuring charge in 2011.
• Goodwill impairment of $15 million, attributable to France operations.
• Net loss of $16.7 million, compared with $14.7 million the previous year.
• Net adjusted after-tax loss3 of $15.3 million, compared with $9.7 million in 2011.
MONTREAL, Dec. 19, 2012 /CNW
Telbec/ – Transat A.T. Inc., one of the world’s largest integrated
tourism companies and Canada’s holiday travel leader, posted revenues of
$763.4 million for the quarter ended October 31, 2012, compared with
$805.9 million for the same period of 2011, a decrease of $42.5 million,
or 5.3%. The Corporation recorded a margin1 of $52.9 million, compared
with $23.5 million before restructuring charge in 2011, and net income
after goodwill impairment of $16.6 million ($0.43 per share on a diluted
basis), compared with a net loss of $7.3 million ($0.19 per share on a
diluted basis) in 2011. Before non-operating items, Transat reported
adjusted after-tax income3 of $28.7 million in 2012 ($0.75 per share on a
diluted basis), compared with $7.3 million ($0.19 per share on a
diluted basis) in 2011.
For the fiscal year ended October 31, 2012, Transat posted revenues
of $3.7 billion, an increase of 1.6% versus 2011. The Corporation
recorded a margin of$17.0 million, compared with $33.0 million before
restructuring charge in 2011, and a net loss of $16.7 million ($0.44 per
share on a diluted basis), compared with$14.7 million in 2011 ($0.39
per share on a diluted basis). The net loss posted in 2012 takes into
account goodwill impairment of $15 million, attributable to theFrance
operations. Before non-operating items, Transat reported an adjusted
after-tax loss3 of $15.3 million in 2012 ($0.40 per share on a diluted
basis), compared with $9.7 million ($0.26 per share on a diluted basis)
in 2011.
“We achieved very good results on the transatlantic market last
summer, and in fact it was one of our best-ever summers. Our product,
frequencies, destinations and marketing efforts helped us deliver the
expected results,” said Jean-Marc Eustache, President and Chief
Executive Officer.
Fourth-quarter highlights
The Corporation’s fourth-quarter margin was $52.9 million, versus
$23.5 million before restructuring charge in 2011, despite a decline in
revenues, which stood at$763.4 million for the quarter, compared with
$805.9 million in 2011. The drop in revenues was attributable mainly to
the Corporation’s decision to reduce capacity on its transatlantic and
Sun destinations markets outbound from Canada and the number of
travellers declined by 6.3% as a result. On the transatlantic market,
which accounts for a very sizable portion of Transat’s summer-season
operations, prices and load factors were superior to those of 2011.
Revenues of North American business units, which are generated by
sales inCanada and abroad, decreased by $39.6 million (7.2%) compared
with the same period in 2011. The decrease stemmed from a decision made
by senior management to reduce marketed capacity. The resulting decrease
in traveller numbers allowed the Corporation to raise its average sale
prices. North American operations delivered a margin of $55.9 million,
versus $8.9 million before restructuring charge in 2011. The improved
margin is due mainly to the higher sales prices as well as load factors
superior to those recorded in the last quarter of 2011.
Revenues of European business units, which are generated by sales
made in Europe and in Canada, decreased by $2.8 million (1.1%) from
2011. The decline is attributable to a weakening of the euro against the
dollar, since revenues of the Europe-based units, when expressed in
local currencies, actually posted gains compared with 2011. During the
quarter, the number of travellers was up slightly. European activities
resulted in an operating loss of $3.0 million for the quarter, compared
with a margin of $14.6 million before restructuring charge in 2011. The
change resulted, in part, from the expiry of the Corporation’s contract
withThomas Cook Airways.
Fiscal year highlights
For the fiscal year, the Corporation’s revenues stood at $3.7
billion, an increase of $60.1 million over 2011. Transat recorded a
margin of $17.0 million, compared with $33.0 million before
restructuring charge in 2011.
Financial position
The Corporation’s free cash totalled $171.2 million as at October 31,
2012, compared with $181.6 million as at October 31, 2011. The working
capital ratio was 1.0, versus 0.97 a year earlier, and deposits from
customers for future travel amounted to $382.8 million, compared with
$348.0 million on the same date the prior year. Off-balance-sheet
agreements stood at $557.1 million as at October 31, 2012, compared with
$653.7 million as of October 31, 2011; the decrease stems from payments
made during the fiscal year.
International Financial Reporting Standards (IFRS)
The consolidated financial statements of the Corporation for the year
ended October 31, 2012, were prepared in accordance with International
Financial Reporting Standards (“IFRS”). The 2011 comparative figures have been restated to reflect this change. In summary, the adoption of IFRS
has had a minor impact on Transat. It decreased the total equity’s
carrying value by $25.4 million as at October 31, 2011, compared with
the previous Canadian GAAP’s carrying value as at the same date. For the
three-month period ended October 31, 2011, the consolidated net loss
attributable to shareholders has been reduced by $0.1 million compared
to the figures disclosed last year under Canadian GAAP ($0.4 million for the 12-month period). Please see the Management’s Discussion & Analysis for more details.
Restatement of prior-years’ financial statements
The Corporation has restated its financial statements for fiscal 2011
following discovery of a recurring accounting error starting in 2006
within its U.K. subsidiary, which was acquired that year. Amounts
received from customers for services not yet rendered were not properly
recorded in conformity with the Corporation’s accounting policy in
current liabilities under Customer deposits and deferred incomefor
fiscal years 2006 to 2011. Accordingly, the Corporation has reduced its
retained earnings as at November 1, 2010 by $11.7 million, which is the
sum of the annual variance in earnings for the years 2006 to 2010 (the
negative variance is$3.1 million in 2006, $3.8 million in 2007, $1.6
million in 2008, $2.1 million in 2009 and $1.1 million in 2010). For the
year ended October 31, 2011, the Corporation increased its net loss by
$2.9 million or $0.08 per share, from $11.8 million to $14.7 million. On
the balance sheet, income taxes receivable as at October 31, 2011have
increased by $2.3 million and customer deposits and deferred income has
increased by $16.7 million.
Outlook for the first six months
The Canadian Sun destinations market accounts for a substantial
portion of Transat’s business during the winter season. With regard to
this market, we are early in the season and a significant number of
seats remains to be sold, thus the trend toward last-minute bookings and
margin volatility make forecasting difficult.
On this market, Transat’s capacity is approximately 10% lower than
what was marketed last year. Load factors are similar to those recorded
last year at the same date, while average selling prices are higher.
In France, where winter is low season, medium-haul bookings are 30%
higher compared to last year at this time, long-haul bookings are down
8% (a reflection of the Corporation’s decision to reduce capacity), and
prices are similar in both cases.
On the transatlantic market, Transat’s capacity is approximately 18%
lower than that marketed last winter, load factors are similar, and
selling prices are higher.