HLO reports $70m loss

HELLOWORLD Travel Limited’s full year result reflects the “perfect storm” of COVID-19, with the virtual shutdown of the global travel industry seeing it report a $70 million statutory loss after tax (TD breaking news).

The result included non-cash writedowns of the value of its Australian wholesale and inbound operations ($51.8 million), as well as a $13.7 million impairment in the value of corporate travel business TravelEdge, which was acquired by Helloworld on 01 Oct 2019 for $22.6 million.

CEO Andrew Burnes said the company was working to manage its response to the crisis, cutting costs, extending its liquidity and continuing to manage refunds.

“We are confident that when they can travel, our customers will need the help of their travel professional more than ever”, he said

AGGRESSIVE pursuit of cost reduction targets through the COVID-19 period has seen Helloworld Travel reduce its net operating cash outflows to about $2 million per month, excluding one-off costs.

According to the company’s full year results announcement, savings include the elimination of a wide range of discretionary variable expenses across the business, renegotiations with landlords which have saved about 25% on occupancy costs, and a 35% workforce reduction in Australia, New Zealand, Fiji and India, with the remaining personnel working reduced hours or placed on stand-down.

The recent $50 million equity raising has helped boost the company’s cash balance to $174.8 million, giving Helloworld an “extended liquidity runway beyond end 2022”, even if there is ongoing disruption to international travel markets.

Helloworld’s bankers have agreed to suspensions of certain financial covenants, and the pricing of existing loan facilities has not changed.