Transat A.T. Inc. (TSE:TRZ.B), Canada’s largest tour operator, climbed in morning trading after reporting a narrower-than-expected loss in its fiscal second quarter as revenue improved despite a sudden depreciation in the Canadian dollar.
Shares gained 7.5 percent to C$9.00 at 10:07 a.m. in Toronto, trimming this year's slump to 29 percent.
Net loss narrowed to C$7.9 million, or a loss of C$0.20 per diluted share, in the three-month period ended April 30, from C$22.8 million, or a loss of C$0.59 per diluted share, in the year-earlier period, the Montreal, Quebec-based company said in a statement today.
Adjusted loss was C$0.19 per share, narrower than a loss of C$0.32 per share estimated by analysts, according to Thomson Reuters.
Revenue rose to C$1.12 billion from last year's C$1.11 billion in the previous year. Bay Street predicted C$1.14 billion.
The company said the results were slightly better than it expected, despite a sudden drop in value of the Canadian dollar that led to a significant increase in operating expenses.
"It was a peculiar winter," Chief Executive Officer Jean-Marc Eustache said in the statement. "In December, margins were higher year-over-year and we were heading toward a performance improvement. The sudden drop in value of the Canadian dollar provoked a significant increase in operating expenses that reversed the situation, as it came early in the season, when the market resists increases in selling prices."
During the quarter, Transat slashed capacity on its sun-destination routes by 3.5 percent, which contributed to a 5.3 percent overall decrease in the number of travellers. Average selling prices were up, and the euro and pound traded higher against the Canadian dollar.