Notification on material event
Information update due to spread of COVID-19
Novaturas Group, the leading tour operator in the Baltics, today is providing an update for trading due to the spread of COVID-19 virus.
After a successful start of 2020 in terms of sales and profitability, Novaturas group in March has faced a reduced demand for tour packages due to the spread of virus. This will have an impact on the first quarter of 2020 financial results, which will be more moderate than planned before.
What regards our business most is the virus spread in Northern Italy, a popular skiing destination. Taking care of our clients and employees, we have suspended our flights to Northern Italy from Latvia and Lithuania.
Virus has also affected the demand for trips to Tenerife, the popular winter destination. Lithuanian Ministry of Foreign Affairs has been advising travellers to suspend their trips to Costa Adeje town in Tenerife on 25 February-4 March.
Our primary focus has always been security and health of our travellers and employees, therefore we follow recommendations of responsible institutions in all Baltics, mainly Ministries of Foreign Affairs, Ministries of Health, consumer rights authorities. We are also in close contact with our local partners and authorities in our destinations and clients.
Currently, it is difficult to predict the extent and duration of the outbreak and the impact on our financials. To manage the situation, we immediately focused on even more efficiency management, cost management, and are negotiating more flexible pricing with partners and suppliers. However, we are confident that as situation normalises and macro situation remains stable, we get back to our business on a full scope. Our asset-light business model and strict cost and cash control enables us to adapt to changing situation promptly.
Novaturas Group is the leading tour operator in the Baltics states. Since 21 March 2018, Novaturas shares have been dual-listed on the Warsaw Stock Exchange and on Nasdaq Vilnius.
Novaturas was established in 1999, became the market leader in the Baltics in 2004. Aside from the Baltics, Novaturas has begun offering its products in Belarus, where they are retailed through local partners.
Novaturas continues to attract new clients thanks to its attractive and diverse offering and the high quality of its services. The Group offers both summer and winter package holidays as well as sightseeing tours by coach or plane to more than 30 destinations worldwide, including the most popular holiday resorts in Southern Europe as well as select locations in North Africa, the Middle East, Asia and Latin America.
The Group's strategy also aims to retain diverse and complementary distribution channels. Novaturas works with over 400 travel agencies, including all of the major agencies in the Baltics. It also operates retail offices of its own in main cities of Lithuania, Latvia and Estonia, and is investing in further development of its e-commerce channel.
The Company’s asset-light business model, which is characterized by strong cash flows from operating activities and low capital expenditures, allows it to pay out a large part of its earnings to shareholders. Paying regular dividends is one of the key elements of the Company's strategy. Every year the Management Board expects to propose for distribution 70-80% of the Company’s net profit.
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