Preliminary financial results for 2 months of 2020 and update on COVID-19 business impact
Novaturas Group turnover in February 2020 reached EUR 10.2 million and was 5% higher than at the corresponding time last year. Total January-February turnover reached EUR 18.9 million - 1% less than during the same period in 2019.
During February 2020, the Company has served 13.2 thousand clients - 1 percent less than in the corresponding period last year. 25.8 thousand people have traveled with us during January-February of 2020 - 7% less than last year.
After a successful start of the year, Novaturas Group together with the global travel industry has faced declining travel demand in March due to the spread of COVID-19. After local governments in the Baltics have decided to take isolation measures, we have suspended all our operations until April 14th in Lithuania and Latvia and until May 1st in Estonia.
This affects the financial results of the first half of this year that will be lower than expected before. Continuing uncertainty might also affect yearly results that might be more moderate than planned before. Faced with the uncertainty of the situation, the Company withdraws previously announced financial forecast for 2020 and plans to update it when business returns to normal.
At the moment, it is difficult to predict the magnitude, duration and precise impact of the virus outbreak on our financials. To manage the situation, we have immediately entered cost-saving mode and continue to focus on operating efficiency. We are negotiating more flexible pricing with our partners at destinations, suppliers and are also cooperating with the local authorities in the Baltics for state-wide measures to deal with the situation in the tourism industry.
Novaturas Group operates with an asset-light business model that provides a high degree of flexibility and responsiveness to changing circumstances. The company also notes that it has planned financial resources to manage the situation until the spread of the virus is controlled and it is safe to travel again.
About Novaturas Group
Novaturas Group is the leading tour operator in the Baltics states. Since 21 March 2018, Novaturas shares have been dual-listed on the Warsaw Stock Exchange and on Nasdaq Vilnius.
Novaturas was established in 1999, became the market leader in the Baltics in 2004. Aside from the Baltics, Novaturas has begun offering its products in Belarus, where they are retailed through local partners.
Novaturas continues to attract new clients thanks to its attractive and diverse offering and the high quality of its services. The Group offers both summer and winter package holidays as well as sightseeing tours by coach or plane to more than 30 destinations worldwide, including the most popular holiday resorts in Southern Europe as well as select locations in North Africa, the Middle East, Asia and Latin America.
The Group's strategy also aims to retain diverse and complementary distribution channels. Novaturas works with over 400 travel agencies, including all of the major agencies in the Baltics. It also operates retail offices of its own in main cities of Lithuania, Latvia and Estonia, and is investing in further development of its e-commerce channel.
The Company’s asset-light business model, which is characterized by strong cash flows from operating activities and low capital expenditures, allows it to pay out a large part of its earnings to shareholders. Paying regular dividends is one of the key elements of the Company's strategy. Every year the Management Board expects to propose for distribution 70-80% of the Company’s net profit.