(MENAFN- GlobeNewsWire - Nasdaq) Novaturas Group, the leader in the Baltic tourism market, has reported revenues of EUR 91.3 mln. generated in the period from January to June this year. This represents a decrease of 9.9 %, compared to the first half-year of 2023, when revenues reached EUR 101.4 mln. Nevertheless, the strategic goal of maintaining regional leadership in a dynamic environment has been achieved. During the first half-year, the company served 112 thsnd. customers in the Baltic States, which is a decrease of 9.4%, compared to the corresponding period in 2023. The company's EBITDA (earnings before interest, taxes, depreciation and amortisation) for the first half-year was negative and amounted to EUR 1.6 mln., whereas the net loss was EUR 2.3 mln.
“We relate this half-year result to complex reasons, some of which were already present in the first quarter. One of the main reasons is the competition in the market, which has already increased since last year and continues to intensify. This has led to an oversupply of travels in the Baltic States, which has outstripped demand this year and led to intense price competition. Particularly strong supply was recorded for trips to Turkey, the Greek islands and other most popular destinations,” said Kristijonas Kaikaris, CEO of Novaturas.
According to him, Novaturas has responded to the market situation by optimising the travel programme and reducing the volume of certain flights.“However, even though we have seen an oversupply, we have not carried out aggressive optimisation to ensure our obligations to the customers, because their trust is our priority. We have also sought to rely on our broadest offering of destinations in the region, and by reducing volumes in Turkey, we have been able to partially diversify our operations and focus more on other destinations,” said Mr Kaikaris.
All these factors have helped the company to achieve its strategic goal of maintaining its market leadership in such a dynamic environment.“While this has had a negative impact on profitability in the short term, we believe that maintaining leadership is important for long-term success, as it allows us to maintain the trust of our customers, agencies and other partners, and to offer our solutions and services to an even wider range of customers in the future,” added the CEO of Novaturas.
The management of Novaturas Group is also considering the alternatives for raising additional capital and has been currently evaluating the possibility of a bond issue as one of them. This would be aimed at raising funds to invest in the development of services and the improvement of customer experience and to ensure financial stability. This is important in balancing the fluctuations in cash flow that occur in the tourism sector due to the nature of business and seasonality. The company also relates the raising of additional capital to its strategic goals of delivering long-term shareholder value and maintaining its leading position in the Baltic States.
Expanding the hotel offering to customers
One of the areas of service development in which the company is actively working is a hybrid travel packaging solution, which the company aims to introduce to its customers in certain destinations later this year.
“This solution will allow us to integrate new accommodation providers into our reservation systems and thus provide our customers with a much wider choice of hotels. We will therefore offer travellers even better accommodation options, more flexibility and more attractive prices to suit their needs. This solution will allow us to attract a wider audience of customers, as well as to increase our revenues and improve our load factor,” explains Mr Kaikaris.
According to him, the service is planned to be launched first in the ski destinations of the upcoming winter season (Italy, Austria, France), and then to be extended to other destinations (the resorts in Spain, Italy, Portugal), and gradually expanded afterwards. In the long term, the company also plans to launch dynamic packaging, which will allow a choice not only of additional hotels, but also of flights (not only by Novaturas, but also by various air carriers). This will give travellers even more flexibility in terms of flight times, destinations and prices.
Better early bookings for the winter season and new services
In July Novaturas announced that it had already sold around 75% of this year's programme, just like last year. According to the CEO of the company, this is a good achievement given the current market situation and the supply available. The Group has also had a successful start with its 2024–2025 winter holiday programme, which was launched in June. For the coming winter season, Novaturas offers Lithuanian travellers a total of 21 different destinations in 18 countries, Latvian travellers are offered 20 destinations in 17 countries, and Estonian travellers can choose from 17 destinations in 14 countries.
According to the company, the early bookings for the winter season exceed the result recorded last year. During the summer months, Lithuania and Latvia have so far recorded a 25% increase in early bookings, with only Estonia experiencing a slowdown in the market due to the macroeconomic situation.
There has also been an increase in demand observed in exotic travel sales, which grew almost 30% this half-year, compared to last year. In addition, a couple of weeks ago Novaturas also launched a brand new winter season destination – trips to The Gambia with Turkish Airlines, as well as package tours to the Dominican Republic. The company has also introduced combined tours, offering holidays in several different resorts instead of just one. These are available to Indonesia (Bali), Thailand (Bangkok), Vietnam, Cuba and the United Arab Emirates, with combinations of several resorts of interest.
Novaturas also launched a new eSIM mobile internet service in the second quarter of this year. It is available in all destinations offered by Novaturas and allows enjoying better mobile internet rates and a more secure connection when travelling abroad. This is especially relevant when you are outside the EU. Novaturas is the first tour operator in the Baltic States to offer this service to its customers.
The company submits a revenue adjustment
Novaturas Group has already submitted its full unaudited financial statements for the first quarter of 2024. They report first-quarter earnings of EUR 34.5 million. The company revised the figures for the second quarter of this year, and they are as follows: revenue was at EUR 16 million in April (the company announced revenue of EUR 15.1 million in preliminary results of April); revenue was at EUR 19.7 million in May (the company announced revenue of EUR 14.1 million in preliminary results of May); revenue was at EUR 21.1 million in June (the company announced revenue of EUR 21.6 million in preliminary results of June).
The revenue after the revision was at EUR 91.3 million for January through June 2024. The numbers indicate that the actual revenue was higher in the first half of the year than previously announced in the preliminary results.
The changes occurred due to the revision of the preliminary results and the technical error in the revenue calculation in the second quarter results.
Performance of Novaturas Group for the 1 st half-year of 2024 (EUR 000's):
Novaturas Group is the largest and the only charter flights' local tour operator in the Baltic States, offering summer and winter trips to more than 30 destinations worldwide and more than 100 tours. Based on audited data, in 2023 Novaturas Group recorded revenues of EUR 208,3 million and served 259 000 passengers in Lithuania, Latvia and Estonia.