Thomas Cook (India) Limited announces results for Q2 FY21
Thomas Cook (India) Limited (TCIL) India’s largest integrated travel services company, today announced its financial results for the quarter ended September 30, 2020.
Highlights:
· Standalone entity reported a loss of Rs. 38 Mn for Q2 FY21 versus a loss of Rs. 27 Mn in Q1 FY21
· At a consolidated level loss reduced to Rs. 1229 Mn versus Rs. 1361 Mn in Q1 FY21
· Focus on cash conservation & cost optimization resulted in:
o At a standalone level Rs. 687 Mn representing a savings of 48% for Q2 FY21
o At a consolidated level Rs. 2.3 Bn representing a savings of 51% for Q2 FY21
o The company expects to exceed its annual cost savings target of Rs. 5.6 Bn representing approximately 41% savings YoY for FY21
· TCIL continues to maintain short-term liquidity & balance sheet strength given the uncertain environment. The consolidated cash and bank balances are at Rs. 6978 Mn as of September 30, 2020, and is adequate to deal with the commitments for the coming quarters
· The Foreign Exchange business has delivered over 79000 transactions, registering a gross volume of Rs. 12.1 Bn YTD FY21, with a revenue recovery of 43%
· The Corporate Travel business has issued over 44,000 tickets for FY21 since the restart of domestic travel, with a revenue recovery of 16%. 44 clients of the recently acquired dnata Travel’s corporate travel portfolio have been integrated with the business unit
· The Holidays business that reopened in phases post-May 4th, leveraged pent up demand, with over 8000 customers YTD FY21 – primarily for domestic holidays, as well as Maldives and Dubai
Other updates:
· Foreign Exchange: The entire Foreign Exchange branch network is currently operational along with all the airport centres. The business continues to focus on technology-enabled customer-centric solutions to build a contactless experience for the customer.
· MICE verticals across Thomas Cook & SOTC have re-imagined their business maximising on digital/virtual hybrid models: digital R&R events were successfully completed for top corporates in addition to physical events in key cities like Mumbai and Delhi while adhering to all health and safety protocols as per the Companies’ Assured guidelines. The innovative Gourmet Genie has also seen encouraging uptake from Corporates towards gifting for the festive season; immunity booster snacks and hotel gourmet meals seeing high demand.
· Leisure Travel businesses of Thomas Cook & SOTC have reopened 153 retail outlets across 72 cities pan India. The Companies launched Virtual Roadshows across 50 cities pan India to activate latent demand and ensure a contactless customer experience in the COVID environment. Over 150 new holiday packages have been launched with attractive pricing and offers. Additionally, Thomas Cook and SOTC recently conducted India’s first physical holiday roadshows since lockdown – Thomas Cook India’s Freedom Month Celebrations and SOTC’s Freedom Month Carnival – a series of customer centric roadshows, in association with Accor and Marriott hotels.
· Business Travel has commenced implementation of bots to enhance the customer experience. E-submissions have been initiated for select customers.
DMS (Destination Management Service) Business:
o Asian Trails Ltd.: Asian Trails has been officially certified with the Safety and Health Administration Certificate by the Tourism Authority of Thailand. The company has also received recognition with official endorsement by the World Travel and Tourism Council’s (WTTC) Safe Travel Protocols for Tour Operators – for the implementation of global standard health and safety procedures
o ATM – Australia: A monthly newsletter has been initiated to keep all partner agents updated on the current situation in Australia
o TCI-HK: Launched an Online Travel Talk series on social media channels like Facebook and YouTube featuring seasoned tour managers showcasing highlights and their unique experiences when travelling to the selected destinations of key markets. This is an entirely in-house production with the scriptwriting, shooting and video editing managed by the sales and marketing teams
Vacation ownership & resorts business (Sterling Holiday Resorts Limited):
o The process of opening up of resorts began in Q2 basis government easing restrictions; at present all resorts are operational
o Expect to see the reasonable gain in momentum in Q3 with the upcoming holiday season, post relaxation of restrictions in many locations
o Membership business complemented with the addition of a new 10-year Vantage product
o Sterling CARES, a new hygiene and sanitation program, continues to be a highly focused area, especially in locations where the business has recommenced
o A tight control on opex spends continues to help maintain cash flows
o Initiatives to promote weddings at resorts is being done with the branding of Sterling Weddings, which will be an attraction in the resorts
o Positioned Nature Trails resorts as Sterling Nature Trails which is expected to bring in some traction
DEI Holdings Limited:
o Despite the impact of the pandemic, DEI has managed to achieve revenue of Rs. 374 Mn in Q2 FY21 Vs Rs. 82 Mn in Q1 FY21. Losses at EBIT level have reduced to Rs. 111 Mn in Q2 FY21 v/s Rs. 173 Mn in Q1 FY21
o Given travel restrictions in most overseas markets, DEI has effectively targeted local GCC customers to generate strong per cap (per person spend). Attendance recovery is currently between 20-30% of 2019 levels
o While revenue margin has been impacted due lower sales, strategic initiatives undertaken include partner negotiation on lower revenue share terms, waiver on MG/Sponsorship for rest of the year 2020
o Direct labour control in China, Malaysia and Singapore resulted in better labour productivity
o DEI has acquired imaging rights at Dubai Safari Park. With an anticipated annual footfall of over 3.7 Mn and DEI’s expertise in capturing animal interactions, it is expected to be one of its key clients in the region. DEI has also started a unique presold VIP experience for a more photo immersive experience for the guests
o In its 25th year of operations, Global Village, UAE’s largest multi-cultural festival park (4th largest daily footfall- globally), has chosen DEI as its photography partner. DEI managed to secure this account without any Minimum Guarantee
o The region’s largest aquarium, The National Aquarium, Abu Dhabi has partnered with DEI for its photography operations. Set to be open for public in December 2020, this family destination is expected to receive close to 1 Mn guests annually
o DEI is in the concluding stages of finalizing the agreement for providing imaging services and solutions to Expo 2020- stated to be UAE’s biggest event ever with an expected footfall of 18 million guests.
Management comments:
Mr. Madhavan Menon, Chairman and Managing Director, Thomas Cook (India) Ltd., said, “At the TCIL Group, we have navigated through the worst phase of the global pandemic with a balance of prudent cost management, cash conservation and focused sustainable business activity.
Our Forex business will continue their focus on remittances and cards; our Holidays business on domestic tourism along with reopened international destinations & Corporate Travel, primarily on domestic travel and international sectors as businesses resume normal operations.
Looking ahead, I am confident that with the recent positive news of an effective vaccine test and confidence returning worldwide, the TCIL Group is best poised to make the most of the opportunity – as travel rapidly rebounds.”
Innovation and new products-services:
o Thomas Cook India and SOTC introduced exciting savings for customers with the launch of the Holiday Card – with an attractive 15% cashback on the prepaid value and offering total flexibility of destination/dates of travel
o Thomas Cook India and SOTC launched India’s first Safe Holiday Helpline – a free service to assist and support customers in safe holiday planning, with comprehensive guidance across country-specific health & safety protocols, visa and travel updates with documentation, requirements including COVID-19 negative certification, etc.
o Thomas Cook India joined hands with PAYBACK India, the country’s largest multi-brand rewards & loyalty program
o Thomas Cook India introduced a series of unique products, including premium, chauffeured Van Tours – Private Journeys, Honeymoon Specials & Romantic Breaks, City Escapes, Durga Puja Specials, A La Carte Holidays
o On the Domestic front, Thomas Cook India & SOTC launched Jungle Experiences & Safaris on International Tiger Day, Ramayana Trails and India’s Hidden Gems and Great Indian Journeys – a unique partnership with India’s favourite storyteller Amar Chitra Katha to take India’s young explorers and parents on an epic journey through time to discover India’s rich heritage and culture
o Virtual Consumer Roadshows across over 50 cities offered India’s consumers a pioneering virtual platform towards contactless and convenient holiday planning together with travel experts
o Thomas Cook India & SOTC announced a Virtual Mega Customer Event – Relive the Dreams Mega Event for Thomas Cook India’s customers and Blockbuster Evening for SOTC’s customers
o Thomas Cook India and SOTC announce the launch of a unique Customer Loyalty Program, Priority, for their most valuable customers offering priority services, special offers, previews and special partner offers among others
India Network expansion:
o Thomas Cook India opened a new franchise (Gold Circle Partner) outlet in Panchkula, Chandigarh