No plans for Helloworld to raise capital, with enough liquidity to maintain operations for 12 months or longer.
Helloworld Travel Limited has just issued a trading update confirming that its Total Transaction Value (TTV) has been “dramatically impacted by COVID-19 across all business units,” with the company expecting revenues from travel sales and operations to remain at around 5% of previous levels until at least September this year.
After reducing staff numbers by 75% at the beginning of April, the JobKeeper initiative has seen many return, with the company now having more than 560 employees working in the business in Australia, New Zealand and elsewhere, many on reduced hours. However more than 1,050 personnel have been stood down across the world.
Salary costs have been reduced from an average $12 million per month to just $1 million after government allowances, while CEO Andrew Burnes and Executive Director Cinzia Burnes have reduced their salaries to zero.
Helloworld is planning for revenues of no greater than 5% of previous levels between April and September 2020, and is forecasting the reopening of the domestic travel market by September, and trans-Tasman travel in October or November this year.
However “HLO does not expect mid- to long-haul international outbound travel in the corporate or leisure markets to resume with any material volume until 2021, and a full return to past levels will be conditional upon a vaccine or cure for COVID-19 having been developed and widely distributed,” the company said.
Helloworld has sufficient liquidity to maintain operations for 12 months or longer, with the company also noting that members of its agency networks in Australia and New Zealand were processing tens of thousands of refunds for travel booked with the company’s supplier partners.
Based on current expectations Helloworld Travel Limited will incur cash losses of $1.5m-$2m per month for the next six months, moving to a break-even position in the December quarter and a small profit in the first six months of 2021.
More details in today’s issue of Travel Daily.