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Travelport Worldwide Limited Reports Fourth Quarter and Full Year 2016 Results

February 23, 2017 Financial No Comments Email Email

Travelport Worldwide Limited (NYSE: TVPT) announces its financial results for the fourth quarter and full year ended December 31, 2016.http://www.rembrandtbkk.com/

Key Points (for full year 2016 unless stated otherwise)

  • Net revenue increased 6% to $2,351 million. Net income of $15 million, income per share (diluted) of $0.13 and net cash provided by operating activities of $299 million
  • Air revenue increased 3% to $1,651 million; Beyond Air revenue growth of 18% to $579 million, contributing 26% of Travel Commerce Platform revenue (2015: 23%)
  • eNett net revenue increased 64% to $150 million
  • Adjusted EBITDA increased 7% to $574 million, Adjusted Income per Share (diluted) increased 23% to $1.23 and Free Cash Flow increased $35 million to $192 million
  • Fourth quarter net revenue increased 2% and Adjusted EBITDA increased 1%. Net loss of $9 million
  • Increasing strategic investments and expenditure to drive product innovation and platform performance
  • Post period-end, announced strategic sourcing partnership agreement with Tata Consultancy Services and signed agreement to divest 51% stake in India-based technology development company IGT Solutions Private Ltd. (IGTS)
  • Issued 2017 guidance, including expected mid single-digit growth for Travel Commerce Platform net revenue partly offset by IGTS divestment, and low single-digit growth for Adjusted EBITDA after strategic growth expenditure

Gordon Wilson, President and CEO of Travelport, commented:

“In 2016, Travelport delivered its highest level of net revenue and Adjusted EBITDA growth over the last five years, as we continued to execute against our strategic objectives.  We achieved consistently strong growth in International regions and realized positive momentum in the United States, where we grew our reported segments by 3% during the fourth quarter.  Our Travel Commerce Platform continues to expand, with Beyond Air growing by 18%, driven by our leading hospitality content and mobile solutions, as well as the ongoing strength of our commercial payments business, eNett, which grew net revenue by 64% in 2016.

Looking ahead, we are delighted to have signed several new and significant agency deals that we expect will drive revenue growth as those customers implement and transact with us.  Moreover, we see several longer-term growth opportunities for our business, which has resulted in us increasing our investment levels commencing from the fourth quarter of 2016 and continuing throughout 2017, particularly in the areas of data and analytics, mobile solutions, payments and technology services.  2017 will see raised capital investments plus a further approximately $20 million of incremental strategic expenditure which, together, will enable further innovation for our customers and support sustainable and profitable long term growth.”

Summary

Three months ended

December 31,

Year ended

December 31,

(in $ thousands, except per share amounts) 2016 2015  Better /

(Worse)

2016 2015 Better /

(Worse)

Net revenue 545,432 534,853 2% 2,351,356 2,221,020 6%
Operating income 20,750 39,537 (48)% 200,613 190,523 5%
Net (loss)/income (9,110) 5,959 * 15,046 20,210 (26)%
(Loss)/income per share – diluted $(0.05) $0.04 * $0.13 $0.13
Adjusted EBITDA 130,764 129,606 1% 574,349 535,027 7%
Adjusted Operating Income 73,881 70,028 6% 340,898 305,319 12%
Adjusted Net Income 28,257 27,194 4% 154,494 122,345 26%
Adjusted Income per Share – diluted $0.23 $0.22 5% $1.23 $1.00 23%
Net cash provided by operating activities 85,161 108,488 (22)% 299,019 262,223 14%
Free Cash Flow 47,831 78,778 (39)% 191,559 156,128 23%
Adjusted Free Cash Flow 25,397 70,331 (64)% 155,840 134,127 16%
Cash dividend per share $0.075 $0.075 $0.300 $0.300
* Percentage calculated not meaningful
The Company refers to certain non-GAAP financial measures in this press release, including Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net Income (Loss), Adjusted Income (Loss) per Share, Capital Expenditures, Net Debt, Free Cash Flow and Adjusted Free Cash Flow.  Please refer to pages 12 to 15 of this press release for additional information, including reconciliations of such non-GAAP financial measures.

Discussion of Results for the Fourth Quarter and Full Year of 2016

Net Revenue

Net revenue is comprised of:

Three Months Ended December 31, Year Ended December 31,
(in $ thousands) 2016 2015 % Change 2016 2015 % Change
Air $373,645 $372,026 $1,651,316 $1,603,302 3
Beyond Air 144,077 130,852 10 579,133 491,855 18
Travel Commerce Platform 517,722 502,878 3 2,230,449 2,095,157 6
Technology Services 27,710 31,975 (13) 120,907 125,863 (4)
Net Revenue $545,432 $534,853 2 $2,351,356 $2,221,020 6

Fourth Quarter 2016
Net revenue increased by $11 million, or 2%, to $545 million primarily due to growth in Travel Commerce Platform revenue of $15 million, or 3%.  Within Travel Commerce Platform revenue, Air revenue increased marginally by $2 million, mainly due to growth in air segments.  Beyond Air revenue increased by $13 million, or 10%.  Within Beyond Air, net revenue for eNett increased 43% to $37 million primarily due to an increase in the volume of payments settled with existing customers.  Technology Services revenue decreased by $4 million, or 13%, due to a reduction in hosting activities and lower development revenue.

Full Year 2016
Net revenue increased by $130 million, or 6%, to $2,351 million primarily due to growth in Travel Commerce Platform revenue of $135 million, or 6%.  Within Travel Commerce Platform revenue, Air revenue increased by $48 million, or 3%, mainly due to improved pricing and merchandising.  Beyond Air revenue increased by $87 million, or 18%.  Within Beyond Air, net revenue for eNett increased 64% to $150 million driven by the volume of payments settled with existing customers and several new customer implementations.  Technology Services revenue decreased by $5 million, or 4%, due to a reduction in hosting activities and lower development revenue.

The table below sets forth Travel Commerce Platform revenue by region:

Three Months Ended December 31, Year Ended December 31,
(in $ thousands) 2016 2015 % Change 2016 2015 % Change
Asia Pacific $124,191 $   109,242 14 $  512,521 $    459,557 12
Europe 163,755 159,405 3 722,058 634,238 14
Latin America and Canada 24,217 24,146 106,834 99,228 8
Middle East and Africa 66,439 69,948 (5) 290,068 289,477
International 378,602 362,741 4 1,631,481 1,482,500 10
United States 139,120 140,137 (1) 598,968

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