Travelport Has Had Mixed Success as a Public Company
Skift Take
Travelport's latest earnings report is a chance to judge its performance since it went public in 2014. The answer is mixed: The company invested more than its rivals in its airline distribution business, which let it punch above its weight. But not everything on other matters panned out as well as it might have hoped.
Travelport, the travel distribution tech company, remains on track to go private before June, which means its financial inner workings will soon be off limits to the public.
On Friday, the Langley, U.K.-based company reported its earnings, which showed Travelport had a mixed performance last year.
In 2018, Travelport's full-year net revenue rose 4 percent to $2.55 billion. That was at the low end of the 4 to 6 percent range of guidance for the year, but still in range.
The company suffered the loss of travel agency Flight Centre. In a smaller blow, Tripsta, one of its partner online travel agencies in Greece, went bankrupt.
Travelport balanced its losses with better-than-expected gains in Asia, which had 10 percent year-over-year growth thanks partly to a recent series of client wins in India.
Sabre, Travelport's larger rival, reported that its revenue last year grew at a faster rate of 7.5 percent, to $3.87 billion. Sabre said its growth for the year partly reflected stronger-than-expected industrywide spending on travel in Europe and North America. Sabre's growth in revenue terms in 2018 in distribution was at a faster pace than Travelport's, not least due to Sabre’s win of Flight Centre. However, Sabre's growth may be slower in 2019 unless it has another comparable travel agency win.
The other leading peer technology company, Amadeus, reports its earnings next Thursday. Amadeus has had losses in the distribution business in India relative to Travelport, and these losses may continue in 2019, though the Indian airline industry is quite uncertain overall.
Travelport's net income for 2018 decreased by 46 percent, year-over-year, to $75 million. The company's adjusted net income of $186 million, however, represents a 3 percent gain for the year. The adjusted net income factored out one-time events, such as subtracting $22 million in a non-cash accounting manuever due to the positive news of the company paying off some of its debt faster than expected.
Notable Wins
Friday's earnings report might be one of the company's last public financial disclosures before going private.
The report suggested that the company's management broadly met its promised goals to investors since going public in 2014 of reducing debt while maintaining steady revenue growth and investing in its core technology to become more efficient and nimble. The company's operating cost performance as a business has been the source of much improvement over the peri
