Here is the press release:
TRANSAT A.T. INC. CONTINUES ITS GROWTH
MONTREAL, Sept. 25 /CNW/ - During the quarter ended July 31, 1997, the
revenues of Transat A.T. inc. (the Corporation) rose to 344.8 million dollars
compared to 234.2 million dollars for the corresponding quarter of the
previous year. Of this increase of 110.6 million dollars or 47%, 70.9 million
dollars is due to the acquisitions made in 1996, in particular, Look Voyages
and World of Vacations. This improvement also reflects the increase in the
Corporation's share holding in Look Voyages undertaken in October 1996. The
other subsidiaries of the Corporation improved their revenues by 39.7 million
dollars, or 22%. For the quarter ended July 31 1997, the Corporation posted
net income of $12,803,000, or $0.40 per share, compared to net income of
$8,615,000, or $0.39 per share, for the corresponding period of the previous
year.
For the nine month period ended July 31, 1997, the Corporation's revenues
were 972.8 million dollars, compared to 536.4 million dollars for the same
period of the previous year. The Corporation posted net income of $11,186,000,
or $0.35 per share, compared to net income of $11,269,000, or $0.51 per share,
for the same period last year. These results per share should be considered on
the basis of an average weighted number of outstanding shares of 32,250,164
for the first nine months of 1997, and 21,668,973 (after the stock split) for
1996.
The increase in profitability for this quarter, in comparison to the same
quarter of the preceding fiscal year, is due primarily to an increase in sales
volume, more favorable pricing, lower fuel costs (which were offset by higher
maintenance costs), an increase in interest income and an overall improvement
in net income of the companies subject to significant influence. Furthermore,
Look Voyages posted net income for this quarter compared to a net loss for the
corresponding quarter of the preceding year. Since the beginning of the fiscal
year, revenues at Transat's tour operators rose by 117 million dollars while
revenues generated by the companies acquired during 1996 increased by 276
million dollars. Air Transat's revenues, including revenues generated within
the group, improved by 107 million dollars during the same period. At the end
of this quarter, Air Transat's fleet was comprised of ten Lockheed
L-1011-150s, two Lockheed L-1011-500s and five Boeing 757s.
The Corporation's cash position stood at $152,825,000 as at July 31,
1997, compared to $124,681,000 as at April 30, 1997. During the quarter, the
Corporation generated operating cash flow of $18,756,000 or $0.58 per share,
compared to $11,475,000 or $0.51 per share, during the same period of the
previous year. The effect of the net change in non-cash working capital
amounting to $15,386,000 during this quarter reflects the seasonality of
activities during the summer season. Furthermore, the Corporation acquired
capital assets amounting to 3.4 million dollars and spare parts amounting to
2.8 million dollars. One Lockheed L-1011-150 acquired during the preceding
quarter was financed on a long term basis. Subsequent to the end of the
quarter, the Corporation concluded a new agreement with a banking syndicate.
It now has access to various credit facilities, of which $55,000,000 is a
revolving term credit.
Operating results posted by Look Voyages during this quarter, as well as
for the first nine month period of the fiscal year were consistent with
projected results. Restructuring activities which began at the beginning of
this fiscal year are still being implemented and, even if progress has been
made, management continues its effort to improve Look's profitability.
Transat, a leader in the Canadian travel and tourism industry, is a
publicly traded corporation listed on The Montreal Exchange and The Toronto
Stock Exchange. Through its subsidiaries and affiliates, it is involved at all
levels of the distribution of travel services and air transportation. Transat
is the sole owner of the airline Air Transat, tour operators Vacances Air
Transat/Air Transat Holidays (Montreal, Quebec City, Toronto, Vancouver and
Fort Lauderdale), Vacances Air Transat (France), Nolitour (Montreal), Regent
Holidays (Toronto) and the Tourbec travel agency chain. It also holds a 84%
interest in the French tour operator Look Voyages, which in turn owns 49% of
the France-based airline STAR Europe. Vacances Air Transat holds a 66 2/3%
interest in incoming tour operators DMC-Transat and tour operator KilomŠtre
Voyages. Transat also owns 50% of the (Consultour/Club Voyages franchisor)
travel agency group and airport handling corporation Services Haycot. Transat
also holds a 35% interest in tour operator World of Vacations Ltd.
One fact particularly interesting - and reassuring - is that TRZ has succeeded in making Look Voyages profitable. This a surprising achievement, since no analyst that I know had forecasted that they will do it this year. Also, the earnings are ,01$ over last year; that is very good when you take into account the large dilution of the stock.
Let's hope that the market will react positively this morning.
Best regards,
Marc |
