Webjet was another company to drop its 2019-20 guidance, while also revealing its CEO and senior managers would be taking a pay cut (as Qantas and Air New Zealand managements are).
In a statement to the ASX yesterday the company blamed the impact of the COVID-19 virus for its decision to withdraw the earnings guidance it unveiled last month.
That was for underlying earnings before interest, tax, depreciation, and amortisation of “between $147 million and $165 million, an increase of 14-28% over FY19,” the company said in its interim results.
The shares fell another 5% yesterday to $6.93 and are now down 45% in the past month (and nearly 19% in the last five trading days).
A flood of last-minute travel cancellations had forced the company to make the decision as both Qantas and Air New Zealand explained in similar terms this week.
The company said there has been a “material escalation” in short term travel cancellations and a reduction in overall booking activity.
And while forward bookings beyond three months remain in line with previous expectations it noted that cancellations are occurring at short notice just before travel which is “reducing visibility on future earnings.”
The travel group unveiled plans to cut costs resulting in $10 million worth of savings in the current financial year. Other initiatives are being implemented to ensure the company retains its strategic and competitive advantage when conditions normalise.
This includes the managing director John Guscic and board reducing their salary and fees by 20% until conditions return to normal.
Webjet said the CEO had “agreed to forgo any bonus that would have been achieved in FY20.”
