AB Novaturas - Interim information

Novaturas Group earned EUR 34.5 mln. in the first quarter

Novaturas Group, the leader in the Baltic tourism market, has announced its results for the first quarter of 2024. In January–March, the company generated revenues of EUR 34.5 mln. This is EUR 3.7 mln. (10%) less than in the corresponding period of 2023. The company’s EBITDA (earnings before interest, taxes, depreciation and amortisation) was EUR 316 thsnd.

In January–March, Novaturas Group served a total of 35.7 thsnd. customers in the Baltic States (38 thsnd. in the corresponding period last year).

The net profit of the company for January–March amounted to EUR 8 thsnd. In the same period last year, it was EUR 1.57 mln. These changes are due to complex reasons: a lower demand for Egypt and customer caution due to the military conflict in the Middle East, as well as the changed competitive environment resulting in the decline in profit margins. The company has also recorded the rising operating and commission sales costs this year in order to maintain competitive conditions for employees and partners.

In addition, a large part of the profit for the first quarter of 2023 was due to the decrease in the price of aviation fuel that Novaturas has effectively used. Meanwhile, in January–March this year, such favourable market conditions were not available, which also led to a decline in profits.

Kristijonas Kaikaris, CEO of Novaturas, points out that this year the company has been prompt to respond to changes in travellers’ behaviour and has adapted its travel programme accordingly. This has resulted in optimised operations and a high load factor in all destinations offered by the company, which was 97% on average during the given period.

“In the first quarter of this year, we experienced a drop in demand for flights to Egypt, which is very popular in the winter season. It is also worth mentioning that in the Baltic outbound tourism market we have two new tour operators that mainly focus on the most popular destinations across the Baltic States, i.e. Turkey and Egypt, and naturally seek to compete on the market with their price offers, which has partly affected the changes in our profit margins. Profitability this year has also been affected by increased costs. Finally, we have observed a slightly weaker demand for travel in the Estonian market, compared to Latvia or Lithuania,” says Mr Kaikaris.

He adds that with the widest range of destinations and monitoring the changes in demand in the region, the company has also offered alternatives to travellers, for instance, holidays in favourite destinations such as Tenerife, Madeira, the United Arab Emirates, as well as expanded the range of ski trips by offering 4 destinations and trips to as many as 12 long-haul countries. Novaturas was also the first tour operator in the region to launch its summer season, with flights to the newly introduced Cyprus starting in mid-March and Turkey at the end of March. It was this flexible response that helped navigate the dynamic circumstances and offset the less favourable trends than last year.

Orientation towards the development of new services

In order to strengthen its position and sales volumes, Novaturas intends to further improve the traveller experience and introduce new services this year. The plan is to offer more user-friendly tools for agencies and other business partners, as well as to strengthen its own e-commerce channels. The focus on technology and data analytics-based solutions remains a strategic direction.

Novaturas will focus on projects that could increase the competitiveness of the company, and envisages organisational transformation processes, including improvement of customer experience, strategic partnerships, and organisational structure.

With the widest range of destinations in the region, Novaturas will continue its diversification strategy and focus on higher-margin destinations. The company is also ready to continue to flexibly adapt its travel programme to the needs of travellers and focus on operational efficiency.

“In the summer season, we offer 19 destinations from Lithuania, 14 from Latvia and 15 from Estonia. We aim to make the most of our diversified portfolio of destinations and compete not only in popular summer destinations such as Turkey and Greek islands, but also in resorts in Spain, Italy and Bulgaria, as well as in Montenegro, which has become a business card of the company, and in other destinations where we see greater potential. We observe a growing demand for workation or incentive trips of companies, and Novaturas is an exceptionally strong partner in this area,” says Mr Kaikaris.

At the beginning of May, Novaturas launched early bookings for the next winter season, and will introduce the full winter 2024/2025 programme as well as new destinations in June.

New aviation partners and improved flight experience

Novaturas Group aims to be the first choice for travellers by focusing even more on the quality of services and systematically improving the flight experience. At the end of last year, a long-term cooperation agreement was signed with Heston Airlines, which has become the main flight partner in Estonia.

Through this partnership, Novaturas aims to improve the punctuality of flights and the overall quality of services, from hassle-free and safe flights to a state-of-the-art environment and a higher level of in-flight catering services. The first flights with Heston Airlines from Estonia started on 1 May, and some of the flights with Heston Airlines will also be operated from Lithuania and Latvia.

Heston Airlines operates a fleet of modern Airbus A320 aircraft, which are only 7 years old, so this cooperation will help reduce fuel consumption and minimise GHG emissions during flights.

Novaturas also continues its partnership with airBaltic, which has one of the youngest fleets in Europe, and has announced that it will operate a part of its flights from Lithuania to Turkey this summer season in cooperation with Turkish Airlines, which will fly travellers not only from Vilnius, but also from Kaunas Airport.

“Novaturas” group financials for Q1 2024 (EUR 000's):

	Q1 2024	Q1 2023	Q1 2022
Revenue	34 518	38 172	28 287
Gross profit	4 453	5 958	2 524
EBITDA	317	1 896	(522)
Net profit (loss)	8	1 576	(913)

About the company 
Novaturas Group is the largest and the only charter flights‘ local tour operator in the Baltic States, offering summer and winter trips to more than 30 destinations worldwide and more than 100 tours. Based on audited data, in 2023 Novaturas Group recorded revenues of EUR 208,3 million and served 259 000 passengers in Lithuania, Latvia and Estonia.

CFO
Vaidrius Verikas
+370 646 43758

Attachment

• Novaturas AB 2024 3M interim FS EN

Attachments:

Novaturas AB 2024 3M interim FS EN.pdf