Transat Posts C$138.1M Q3 Loss

Transat AT (TRZ) reported a larger loss in the third quarter of 2021 than a year earlier. The Montreal-based international tourism company specializing in vacation travel partially resumed its operations on July 30, following their suspension on January 29.

Revenues came in at C$12.5 million in Q3 2021, up 31.4% from C$9.5 million in Q3 2020. This rise in revenues is mainly attributable to the activities of the company’s incoming tour operator in sun destinations. (See Transat AT stock charts on TipRanks)

Meanwhile, net loss attributable to shareholders amounted to C$138.1 million (C$3.66 per diluted share) for the quarter ended July 31, compared to a loss of C$45.1 million (C$1.20 per diluted share) in the prior-year quarter. On an adjusted basis, Transat lost C$115.6 million (C$3.06 per share) in the third quarter, compared with a loss of C$139.8 million (C$3.70 per share) a year ago.

Transat reimbursed more than 90% of the amounts claimed by its customers who had their flight canceled due to the health crisis.

Transat president and CEO Annick Guérard said, “We’re very pleased we were able to resume operations as scheduled on July 30 and move into the restart phase where our activities can gradually expand, and particularly as we look forward to a winter season that promises to be much busier than the last one. …

“Beyond resuming our operating activities, gradually recalling our employees and delivering training, we’ll be using this period to implement our strategic plan. We’ve announced two new destinations in the United States for the winter, we’re working on optimizing our capital structure, and we’re engaging in a number of discussions towards entering into airline partnership agreements. Our ambitions are high, but we’re on the right track.”

On July 20, TD Securities analyst Tim James kept a Sell rating on TRZ, while lowering its price target to C$3 (from C$3.25). This implies 39.3% downside potential.

Consensus among analysts is that TRZ is a Moderate Sell, based on one Hold and three Sells. The average Transat price target of C$3.69 implies 25.2% downside potential to current levels.