Transat reports loss, will cut overhead
TORONTO (Reuters) - Transat AT Inc TRZb.TO, a Canadian holiday travel operator, posted a fourth-quarter loss on Thursday, blaming difficult economic conditions and high fuel costs.
The company said competition in the quarter was tough, due in part to economic conditions in Europe. That meant Transat could not offset an increase in fuel costs.
Transat, which competes with WestJet Airlines' (WJA.TO: Quote) WestJet Vacations, Air Canada's ACb.TO Air Canada Vacations and Sunwing Vacations, said it would reduce overhead costs to return to profit. It said it had eliminated 143 jobs in October.
"Despite very disappointing 2011 results, long-term we still like the story and continue to believe the business model remains viable, though in need of some restructuring," wrote Laurentian Bank Securities analyst Ben Vendittelli in a research note. "We believe Transat can return to higher profitability."
Net loss for the quarter ended October 31 came in at C$4.5 million ($4.32 million), or 12 Canadian cents a share, compared with a profit of C$52.4 million, or C$1.37, a year earlier.
Excluding restructuring costs and including adjustments related to fuel hedging and the company's investments, Transat earned 27 Canadian cents a share, compared with C$1.25 in the same quarter last year.
Revenue rose slightly to C$809.9 million from C$778.6 million.
(Reporting by Allison Martell)
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