AB NOVATURAS CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the nine-month period ended 30 September 2019 (unaudited) 2019 nine-month key indicators: - Novaturas’s turnover in the nine months of 2019 was EUR 139,6 mln, or 0.5% lower than in the same period of 2018.
- Gross profit amounted to EUR 16.2 mln and was 20% lower than in the same period of 2018.
- Operating expenses amounted to EUR 13.4 mln or 2% more than in the same period of 2018. Excluding the impact of commissions and one-time expenses, operating costs increased by 4% from the same period a year earlier.
- EBITDA amounted to EUR 3.0 mln and was 59% smaller than in the same period of 2018.
- The actual profit tax rate in the nine months of 2019 was 42.0%, compared to 15.9% in the same period of 2018. The main reason was dividends the Estonian subsidiary paid to the parent company which resulted in a tax payment of roughly EUR 544,000 in Estonia.
- Novaturas had a net profit of EUR 1.3 mln, which is 76% less than in the same period of 2018.
- In the nine months of 2019, the Company served 238 thousand clients, 2% less than in the same period of 2018.
2019 third-quarter key indicators: - Novaturas’s turnover in the third quarter of the year was EUR 56.3 mln, or 6% lower than in the same period of 2018.
- Gross profit amounted to EUR 6.1 mln and was 1.5% lower than in the same period of 2018.
- Operating expenses totaled EUR 5 mln, 3% more than in the same period of 2018. Excluding the impact of commissions and one-time expenses, operating costs increased by 6% from the same period a year earlier.
- EBITDA amounted to EUR 1.3 mln and was 14% smaller than in the same period of 2018.
- The actual profit tax rate in the period was 12.4%, compared to 4.4% in the same period of 2018.
- Novaturas had a net profit of EUR 0.9 mln, which is 28% less than in the same period of 2018.
- In the third quarter of 2019, the Company served 101 thousand clients, 8% less than in the same period of 2018.
CEO’s foreword Dear All, The third quarter of the year has passed. This is the most intense time of the year for our clients as it is during the summer months that most people in the Baltic States go on holiday abroad. The first 9 months of this year were full of challenges for the entire tourism industry in the region. The markets of the Baltic States were exposed to intensified competition and one of the hottest summers in history, which invited people to switch to local tourism instead of going abroad. This clearly influenced our financial performance as well - declining revenue (0.5%) and profitability (59.1%). However, we also have some very positive news - following the unsatisfactory results in July and August, we have delivered extremely well in September - and not only our sales volumes but also our profitability exceeded expectations. The early booking sales of the upcoming summer season has started earliest ever - on the first of August. We are happy to witness that our clients are willingly planning their vacations and benefit from the advantages of early planning. Our clients know that while planning vacations now - they will have the possibility to choose not only from the largest selection of destinations, but hotels as well. Summer 2020 early booking results have outperformed last year's results as we have already sold a lot of early bookings offers. Travel packages remain our key product. Turkey and Greece remain the most popular holiday destinations in summer and Egypt in winter. Our clients continue to be eager to choose holidays in Turkey and Egypt, which are the fastest growing destinations. Turkey showed the strongest growth: during the three quarters of this year, this direction accounted for as much as 41% of all our vacation destinations. Holidaymakers in the Baltic States have truly enjoyed the convenience and affordable quality of Turkish resorts. Each season we offer our clients new directions or bring back previous ones. For the first time, we invited our clients to plan their summer holidays in distant exotic lands - Bali and the Seychelles, and offered a new destination - Slovenia, and returned flights to Croatia. The wide variety of holiday destinations allows us to offer travel to clients of various needs. The number of clients served during the three quarters of this year changed insignificantly and was 2.3% lower than last year. The number of passengers decreased by 7.9% in Lithuania, but increased in other markets - by 9% in Latvia and by 1.4% in Estonia compared to the same period last year. The Lithuanian market remains the largest market for us, serving more than half of our customers. We remain strong because of the diversification of our sales channels: we provide our clients with services through our own traditional and digital channels as well as through our long-term partners - travel agencies. The share of the latter decreased by 0.2% and reached 71.9%. This sales channel remains our top priority. Sales on the Internet and through own agencies increased slightly. We are happy to observe that more and more travelers are choosing not only beach holidays but also sightseeing tours. Sightseeing tours by plane increased by 40,4%, sightseeing tours by bus - 14,8%. We have started to offer sightseeing tours by plane also to other Baltic markets. Recently, we have focused on controlling operating costs. Total operating expenses grew by just 1.78% over three quarters of the year. We regard this as satisfying delivery in the growing economies of the Baltic States. The specifics of the tourist business is that today's situation is determined by decisions made even a year ago, because clients like to plan their holidays in advance. That is why the results of the end of the current period are promising, and looking ahead, I can say that the challenging period has very likely ended and we are back on track of the phase of sustainable growth. Sincerely, CEO Audrone Keinyte Finance director Tomas Staškūnas tomas.staskunas@novaturas.lt, +370 687 10426
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