Flight Centre share price slips despite return to profitability

a man stands with travel documents in hand with a roller wheel suitcase and extended handle next to him holding his forefinger to his lip as he ponders his next move in a deserted airport. as the Qantas share price falls

a man stands with travel documents in hand with a roller wheel suitcase and extended handle next to him holding his forefinger to his lip as he ponders his next move in a deserted airport. as the Qantas share price fallsThe Flight Centre Travel Group Ltd (ASX: FLT) share price is sliding in morning trade, down 2.4%.

The S&P/ASX 200 Index (ASX: XJO) travel share closed yesterday at $22.70 and is currently trading for $22.15 per share.

Below we look at some highlights from the company’s Macquarie Conference Presentation that look to be spurring ASX investor interest today.

What was reported at the presentation?

The Flight Centre share price is falling today despite the company’s CFO, Adam Campbell revealing it had returned to earnings before interest, taxes, depreciation and amortisation (EBITDA) profit in March.

With its leisure business approaching breakeven and its global corporate business back in the green, Flight Centre reported $8 million in underlying EBITDA for March.

Campbell said total transaction volumes (TTV) for March were almost 3 times what they were in the prior corresponding period, reaching 59% of their pre-COVID levels. Corporate business was even stronger, returning to 76% of pre-pandemic figures.

Despite the rebound, revenue margin was said to be below pre-COVID levels “as expected”.

The company’s balance sheet was also looking strong, reporting $2 million in operating cash inflow in March. And it repaid its short-term United Kingdom loan of 115 million pounds in March.

Flight Centre said it’s continuing to invest in people and technology ahead of the larger scale recovery expected ahead.

Flight Centre share price slides on FY22 losses

The Flight Centre share price may be slipping following the guidance provided for the 2022 financial year (FY22).

The company forecast an overall EBITDA profit for the 5 months to 30 June, with continued recovery in the travel sector expected. This follows on a $184 million EBITDA loss in the first half of the year, which was impacted by the Omicron wave.

However, Flight Centre still expects to post a full FY22 underlying EBITDA loss in the range of $195 million to $225 million.

Russia’s invasion of Ukraine has not had a material impact on its business, but tight labour markets and a lack of current capacity on international routes out of Australia were cited as industry wide headwinds.

Flight Centre share price snapshot

The Flight Centre share price is up 20% year-to-date, well outpacing the 3% loss posted by the ASX 200.

The post Flight Centre share price slips despite return to profitability appeared first on The Motley Fool Australia.

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More reading

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 Flight Centre Travel Group Limited. 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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