Mon, Jun 01, 2015 - Page 13 News List

Euro’s drop seen likely to help Lion, Phoenix

INTERNATIONAL TRAVEL:Phoenix Tours could see a rebound in its European travel offerings, while Lion Travel could see more growth coming from its units in China

By Amy Su  /  Staff reporter

The nation’s two listed travel agencies, Lion Travel Service Co Ltd (雄獅旅行社) and Phoenix Tours International Inc (鳳凰國際旅行社), may see rising sales and earnings this year, thanks to the depreciation of the euro and booming international tourism, analysts said.

“More long holidays and the euro’s depreciation may trigger travel demand, as outbound tourists to Europe showed a 16 percent growth in the first quarter from the same period last year,” JPMorgan Securities (Taiwan) Ltd said in a report on Friday, citing Phoenix Tours’ statistics.

More direct flights by Turkish Airlines, which started in March, could also help Phoenix Tours see sales growth and profit recovery this year, the brokerage said.

Phoenix Tours’s first quarter income was NT$30.12 million (US$975,670), or NT$0.51 per share, 86.85 percent more than the same period last year.

The company’s net profit last year dropped 32.07 percent year-on-year to NT$125.5 million, or NT$2.07 per share.

Its European offerings, which accounted for 36 percent of Phoenix Tours’ sales last year, may rebound this year on the euro’s weakness. The company expects a better quarter this quarter, citing higher revenue contribution from cruise and European products.

Lion Travel Service Co Ltd (雄獅旅行社), the largest outbound travel service company in the nation, may see more growth momentum from China this year compared with Phoenix, analysts said.

Lion Travel has set up a Shanghai subsidiary and plans another in Xiamen to focus on the southern China market. It is allowed to distribute domestic flight tickets and provide travel services to Shanghai residents traveling to Hong Kong or Macau, according to JPMorgan.

Although the second quarter was once a weak period for tour agencies, the depreciation of the Japanese yen and the euro will still boost demand for Lion Travel’s North Asia and long-distance lines, SinoPac Securities Investment Service Co (永豐投顧) said.

SinoPac Securities forecast Lion Travel to post a net income of NT$150 million this quarter, up 12 percent from last quarter and 40 percent higher than a year earlier.

Net income for next quarter is set to reach NT$177 million due to the positive impact of seasonal demand, SinoPac said in a note on Thursday.

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