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Source: ONE News
Travel and tourism services company Southern Travel Holdings has reported a $538,000 half year loss as it confronted the global financial crisis, impacts of swine flu, and foreign exchange movements.
The result for the six months to the end of December compared with a net surplus of $503,000 a year earlier, and was achieved on revenue down 27.5% to $9.98 million.
Chairman Rodney Walshe says without the loss on foreign exchange movements and the impact of swine flu cancellations, particularly on the company's Japan student business, break even ebitda would have been achieved in the first half.
Foreign exchange fluctuations are a fact of life in New Zealand tourism and must not be used as the excuse for a poor profit performance, he says.
"A strong tourism business is one which can consistently produce a sound return despite adverse exchange rates particularly one like Southern Travel which is involved in both inbound and outbound tourism.
"Therefore a break even ebitda is not satisfactory and demonstrates the fact that despite the significant restructuring over the past three years, there are still issues in the business which need to be addressed."
Walshe says progress is being made, but because of continuing difficulties in the company's inbound markets and the need to complete a strategic review of the challenged Japan operation, it will be 2011 before an acceptable improvement in results could be predicted.
