Jetset Travelworld downgrades profit guidance
AAP reports that last week, Jetset Travelworld Ltd downgraded its annual profit guidance due to a softer Australian dollar exchange rate and weaker economic conditions.
CEO Peter Collins said the fall in the local currency had left it exposed in destinations were its prices are fixed in foreign currencies and would result in lower outbound travel from Australia.
“As we all know, a combination of adverse economic factors is generating difficult trading conditions for the travel industry,” he told shareholders at its annual general meeting.
“Whilst our financial results for the first quarter were largely in line with expectations, during October conditions and forward bookings deteriorated significantly.”
Mr Collins said if the trend continued, its profit guidance for 2008/09, as outlined in its explanatory memorandum ahead of its merger with Qantas Holiday Ltd and Qantas Business Travel Pty Ltd in July, would not be met.
“We now expect the full year profit before tax to be between 20 per cent and 30 per cent lower than the forecast,” he said.
Jetset had forecast an aggregated pre-tax profit of $70.6 million for the year.
Mr Collin said Jetset will focus on cost control, minimising its discretionary expenditure and will increase its prices “where appropriate”.
“In summary, it is clear that we are operating in a difficult trading period and the operating environment is highly uncertain,” he said.
“However, what we do know is that as a leading vertically integrated travel business with no debt and positive cash flow, we will be as well placed as we possibly can be to defend and improve our market position in the light of these challenges.”
In 2007/08, Jetset made a pre-tax profit of $22.74 million, which was up 22.1 per cent on the previous year.
Its reported annual net profit was $15.30 million, up 17.4 per cent.
Jetset shares were down one cent to 90 cents at 1206 AEDT Thursday.
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