DRMumbai: Thomas Cook (India) Ltd., India’s leading integrated travel services company, has announced its financial results for the quarter ended June 30, 2018, with a strong performance across its various lines of business.
On the results, Madhavan Menon, Group Chairman and Managing Director, said: “This has been a strong quarter across business lines. Our focus for this period was on business enablement for growth and in three primary areas: Shared Services consolidation across businesses for process efficiency, Technology & Automation for scale and productivity and Analytics to drive marketing effectiveness. These are cohesively working well and the resultant uptick is now visible across businesses.”
“The fact that our Domestic and E-business, that we were incubating until now, grew their combined revenues by 34 per cent on a like-to-like basis and are close to achieving profitability is significant.”
On the outcome of the recent acquisition, he said, “Our acquisition of Kuoni’s global network of DMS companies is also delivering with our emphasis on profitability driving the agenda. The global and Indian travel market outlook is positive and with a healthy funnel clearly visible across businesses, we seem set for a good performance for the year.”
Highlights
Group Consolidated
- Revenue from operations for the quarter grew by 10 per cent Y-o-Y from Rs. 15.8 billion to Rs. 17.3 billion on a comparable basis
- Profit Before Tax of Rs. 657 million for Q1 FY19 at a consolidated level
Note: TCIL’s investment in Quess Corp. has been reclassified to that of an associate company w.e.f. March 1, 2018. Therefore, consolidated results for the quarter are not comparable
TCIL Standalone
- Revenue from operations for Q1 increased by 13 per cent year-on-year ( Y-o-Y) from Rs.7884 million to Rs. 8872 million
- Profit Before Tax for increased by 39 per cent Y-o-Y from Rs. 421 million to Rs. 583 million
- Incubating businesses (Domestic & E-business) combined revenues grew by 34 per cent Y-o-Y during the quarter. Both businesses are close to achieving profitability
- Growth in sales, margin improvement and cost efficiency are key drivers for the standalone performance
- Proceeds of the OFS sale have helped reduce finance costs for the business by 22 per cent and improve investment income by Rs. 60 million during the quarter
Segment Performance
Travel & Related Services
- Travel Businesses revenue from operations increased 12 per cent; EBIT registered a growth of 9 per cent Y-o-Y on a comparable basis
- The inbound business which registered a growth of 21 per cent and 71 per cent Y-o-Y in sales and revenue respectively led by higher volumes and better margin management
- The Holidays business registered a sales growth of 14 per cent and MICE a growth of 23 per cent over the corresponding period
- The Company’s focus on sales analytics has resulted in a strong forward booking position – up by over 31 per cent
Note: The quarter ended June 30, 2018, also includes revenues of the Kuoni Global Destination Management (DMS) units, TC Forex and TC Travel units which were acquired after Q1 of FY18
Travel Related Financial Services
- Financial services revenues declined by 8 per cent Y-o-Y mainly due to exchange rate fluctuations in the wholesale business
- Retail sales grew by 2 per cent Y-o-Y on a comparable basis
- The Thomas Cook Borderless Prepaid Card (BPC) sales increased by 18 per cent Y-o-Y
Vacation Ownership & Resorts Business (Sterling Holiday Resorts Ltd.)
- Sterling Holidays achieved an EBITDA of Rs. 7 million as compared to an EBITDA of Rs. 63 million in Q1 last year. The decline was primarily due to a change in accounting policy for revenue recognition subsequent to the implementation of IND AS 115 w.e.f. April 1, 2018. Hence the results are not comparable. Without the impact of IND AS 115, the EBITDA for Q1 FY19 is a profit of Rs. 28 million
- Due to the impact of IND AS 115, Revenues for Q1 FY19 stood at Rs. 729 million against Rs. 815 million last year
- Without the impact of IND AS 115, Revenues for Q1 FY19 were at Rs. 773 million
- The Company revalued its land assets at Rs. 5504 million and recognised a revaluation gain of Rs. 4453 million (net of Deferred tax liability). Post this revaluation, the Net Worth as on April 1, 2018, was Rs. 3405 million
- The Company has recognised a Deferred Tax Asset of Rs. 340 million equivalent to the DTL arising out of the revaluation of land, resulting in a PAT of Rs. 255 million in Q1 FY 19, under IND AS 115
Material Events During the Quarter
- Strengthening financial position: Repayment of borrowings and efficient use of the proceeds is expected to contribute approximately Rs. 360 million to TCIL’s bottom-line annually
- Customer Centricity: A series of customer centricity measures such as the launch of a technology platform for customised holidays, addition of a customer self-service module to the mobile app, enhanced user interface and new features for Thomascook.in, etc. have been launched during the quarter
- A significant Customer Experience (CX) exercise has also been kicked off during the quarter to enhance the quality of customer interaction and increase lifetime value
- Innovation: Foreign Exchange business launched Study Buddy, a unique bouquet of relevant services across various providers for students looking to study abroad. This is aimed at growing the student remittances segment that witnessed a growth of 20 per cent compared to last year
- Expansion: The company won the contract to provide Foreign Exchange services at Jaipur International Airport
