December 17, 2008 / 4:07 PM / in 9 years

UPDATE 1-Transat reports loss as fuel hedging bites

* Transat AT Inc Q4 share loss C$2.41

* Excluding items, has adjusted share earnings of C$0.49

* Q4 revenue rose 16.2 pct to C$790.4 mln

TORONTO, Dec 17 (Reuters) - Canadian travel company Transat AT Inc TRZb.TO reported a quarterly loss on Wednesday as hedging costs related to volatile fuel prices outweighed a 16.2 percent rise in revenue.

The company, parent of airline Air Transat, lost C$78.1 million ($64.5 million), or C$2.41 a share, in its fourth quarter. That’s down from a profit of C$6.6 million, or 20 Canadian cents a share, in the same period last year.

Montreal-based Transat said its results were affected by one-time items, including a C$120.7 million loss on fuel hedging, a C$13.8 million writedown on asset-backed commercial paper (ABCP) investments, and a C$2.3 million foreign exchange loss.

Before exceptions, Transat said it earned C$15.9 million, or 49 Canadian cents a diluted share.

Revenue rose to C$790.4 million from C$680.4 million.

Analysts, on average, had expected earnings of 21 Canadian cents a share before exceptional items on revenue of C$759.1 million, according to Reuters Estimates.

The company said its winter bookings in North America were tracking higher than a year earlier, but warned it expects significantly lower dollar margins compared with last winter as a result of the weakening Canadian economy and increased competition for travel to Mexican and Caribbean markets.

In Europe, winter bookings were tracking lower for long-haul travel, but higher for medium-haul travel.

The company said it completed documentation with National Bank of Canada NA.TO on Oct. 31 to increase Transat’s credit facilities to C$194.0 million until a restructuring plan for the seized-up ABCP market comes into force. At that point, Transat said its credit facilities would increase to C$264 million. ($1=$1.21 Canadian) (Reporting by John McCrank; editing by Peter Galloway)

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