Transat Posts Q4 Loss, Revenue More than Doubles

Transat AT (TRZ) reported a smaller loss in the fourth quarter of 2021 than a year earlier, despite the impact of the COVID-19 pandemic on the entire air transport industry.

The performance of the Montreal-based international tourism company specializing in vacation travel is due to the partial resumption of activities since July 30. (See Analysts’ Top Stocks on TipRanks)

Revenues & Earnings

Revenues came in at C$62.8 million in Q4 2021, up 120.9% from C$28.4 million in Q4 2020.

Operations generated an operating loss of C$118.3 million, compared to C$239.3 million in 2020.

Net loss attributable to shareholders amounted to C$121.3 million (C$3.21 per diluted share) for the quarter ended October 31, compared to a loss of C$238.1 million (C$6.31 per diluted share) in the prior-year quarter.

On an adjusted basis, Transat lost C$118.4 million (C$3.14 per share) in the fourth quarter, compared with a loss of C$156.4 million (C$4.14 per share) a year ago.

Management Commentary

Transat president and CEO Annick Guérard said, “Since we resumed operations on July 30, business has been growing steadily. We met and exceeded our targets for resumption of operations in the last quarter and reduced our use of cash. The winter season that is now beginning will see the continuation of our return to more significant volumes. While we remain cautious given the evolving variants, we remain optimistic that we’re on track to returning to normal.

“Meanwhile, we’re continuing our transformation. Following the extensive streamlining of our fleet that has been ongoing for several years, the codeshare agreement announced this quarter is the first step forward in our alliance strategy, with further advances to follow in the coming months.”

Wall Street’s Take

On November 20, National Bank Financial analyst Cameron Doerksen kept a Sell rating on TRZ and a C$3.50 price target. This implies 22.1% downside potential.

Consensus among analysts is that TRZ is a Strong Sell based on four Sells. The average Transat price target of C$3.19 implies 29% downside potential to current levels.