Transat reports bigger loss, suspends dividend
TORONTO (Reuters) - Transat AT Inc reported a bigger quarterly loss on Wednesday and suspended its dividend as margins for its North American travel packages shrank.
The company, parent of airline Air Transat, posted a loss of $29.4 million, or 90 Canadian cents a share, for the first quarter ended on January 31.
That compares with a loss of $7.9 million, or 23 Canadian cents a share, a year earlier, when the company recorded a writedown of $14 million on asset-backed commercial paper and a $2 million charge on fuel hedging.
Before special items, Transat lost $11.8 million, or 36 Canadian cents a share.
Revenue rose 11.4 percent to $877.3 million from $787.4 million.
Analysts on average had expected a loss of 18 Canadian cents a share before exceptional items on revenue of $819.9 million, according to Reuters Estimates.
The company blamed the steeper loss on lower margins on packages sold in Canada to southern destinations in Mexico and the Caribbean and to the impact of hedge accounting standards.
It said heightened competition and excess capacity would continue to exert pressure on its selling prices and margins, despite expectations of higher demand for its travel packages.
The company said it planned to suspend its quarterly dividend "in order to conserve cash in light of the current economic situation."
(Reporting by Scott Anderson; Editing by Lisa Von Ahn)
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