Novaturas Group's results for 2020: the darkest days - in the past
At the beginning of 2020, coronavirus caused crises led tourism sector to the suspension and forced to fight for survival. All implemented measures and active co-operation with the governments and responsible institutions of the Baltic States, allowed the Company to overcome these challenges. Although last year has been financially unprofitable, “Novaturas” group starts 2021 on a positive note – due to received necessary loans the Company intends to settle with all travelers whose trips were cancelled because of pandemic till the end of February. Also, from February, the Company resumes flights to the most popular winter holidays destinations, and, if the epidemiological situation is favorable, Lithuanian travelers will be offered usual holiday packages in Mediterranean and other southern European resorts. Having in mind that the vaccination processes have started all over the world, the tests are becoming more accessible, tourism infrastructure is adapting rapidly to new health and safety requirements, more holiday destinations become available, in 2021 the Company is ready to fulfill the expectations of its travelers.
Introduced safeguard to protect the interests of travelers
Due to different state regulations regarding the movement, after the first wave of coronavirus, “Novaturas” group was able to resume its operations only in July 2020 and only to a few directions - Greece, Tunisia and Cyprus. Following the announcement of the second quarantine in the Baltic States in November, the Company had to suspend operations once again. This had a strong impact on annual financial and operating results - in 2020, “Novaturas” group served 84% less customers if compared to 2019.
The Company's turnover in 2020 reached EUR 33.1 million and was 82% lower compared to the same period in 2019. EBITDA ratio in 2020 was also negative and amounted to EUR 2.6 mln., while in 2019 it reached EUR 4.3 mln. The overall results of 2020 were worse than the ones reached in 2019, but successfully completed financial liquidity guaranteeing transactions and secured EUR 11 million worth guarantee insurance, which ensures the fulfillment of Company’s obligations to travelers, clearly shows that the Company is ready to return to a sustainable recovery phase.
“Tourism business is a particularly regulated business sector, so based on our plans for 2021, we have agreed on EUR 11 million guarantee and insurance limit. It means that money received from the travelers for their future trips are secured. Given the current planning of 2021 operations, we have decided to use EUR 9 million since the very start of 2021. If the volumes of currently planned operations increase during the 2021, we will use the remaining EUR 2 million from the agreed guarantee insurance limit. This mandatory insurance for tour operators is one of the most important safeguards to protect the interests of travelers”, - says Audronė Keinytė, Head of “Novaturas” Group.
The crisis period program brought positive results
The Company also managed to reach an agreement with AB “Luminor” bank to delay payments of EUR 5 million long-term loan received under the investment and business guarantee fund “Invega”. The repayment term of this loan was extended for 2 years until the middle of 2025. Also “Novaturas Group has agreed on a EUR 1 million long-term loan received under the Ministry of the Economy and Innovation of the Republic of Lithuania and state investment and business guarantee fund “Invega” to refund cancelled trips due to pandemic.
The Company has actively worked with the governments and responsible institutions of all the Baltic States. “Novaturas” group has acquired a loan of EUR 1 million in Latvia. The Estonian and Latvian governments have supported the Company with EUR 60 thousand and EUR 81 thousand subsidies. Repatriation compensation of EUR 167 thousand has also been received in Latvia. The Company in all markets have used a salary compensation of EUR 348 thousand. These state aid measures were crucial for balancing cash flows and were used both for ensuring the Company's liquidity and refunding the travelers. To ensure the Company's liquidity and improve future performance ratios, “Novaturas” group continued to adhere to the crisis period program throughout the year. The main aspects of this program were strict cost-saving policy, absorption of states support and cash flow regulation. As a result, operating expenses reached EUR 6.8 million and was 63% lower than in 2019.
Travelers shown solidarity
The confidence expressed by travelers to the tourism sector and their solidarity in accepting to postpone trips cancelled by the COVID-19 restrictions was undoubted support during difficult period. A significant number of travelers also chose travel vouchers alternative worth of EUR 1.5 million. Having started refunding process already in June 2020, up to date the Company group-wide has already returned EUR 8.3 mln. and until the end of February 2021 all the travelers will be refunded. In order to settle with travelers as soon as possible, the Company in January 2021 has reached an agreement with “Invega” on an additional EUR 1 million 18 thousand loans.
To strengthen the relationship with travelers and to ensure their good experience, the Company took over the core business of the subsidiary “Sofa Travel”. Centralization of customer service processes is one of the planned steps to make Company's own sales channels more effective. This will help to adapt to the newly forming traveling habits, improve the experience of the travelers, maintain high standards of services provided.
Launch of a new product
In June 2020, the Company introduced new product to the market – domestic traveling. “Novaturas” group offered accommodation services and sightseeing trips in Lithuania and since the end of July – holiday options in all the Baltics. Interest in local tourism is gradually growing and the Company continues to develop it.
According to the Company, people who could not travel in 2020 are willingly planning their holidays next year. It influenced to open sales of 2021 summer and 2021 - 2022 winter holiday seasons unusually early. In the beginning of February, the Company has resumed flights to Tenerife. From the middle of February flights are also scheduled to Egypt and the United Arab Emirates and from March – to Maldives. Tourism infrastructure is adapting rapidly to new health and safety requirements, accelerating vaccination processes of high-risk groups and the debates on COVID-19 passports in all over the world provides optimistic perspective of returning to normal and usual holiday planning already in 2021. Safe travel facilities such as quick coronavirus tests are available at almost every airport and it enables people also to plan their vacations in distant exotic holiday destinations without additional difficulties. “Novaturas” group boldly welcomes 2021 - as soon as more holiday destinations are available to travelers from all the Baltic countries, it will be possible to return to more usual holiday planning.
Novaturas Group – selected financial results
|
(EUR 000s) |
12M 2020 |
12M 2019 |
|
Revenue |
33,106 |
179,723 |
|
Gross profit |
3,932 |
21,884 |
|
EBITDA |
-2,557 |
4,263 |
|
Net profit |
-4,990 |
4,214 |
About Novaturas Group
AB Novaturas Group is the largest tour operator in the Baltic States, offering summer and winter package holidays in more than 30 destinations worldwide and more than 100 sightseeing routes. In 2019, the group served more than 293 thousand customers.