CTM Reports 42% Profit Decline, Revenue Falls 6% in 1H FY25

Financial Overview

Corporate Travel Management Limited (ASX: CTD) released its half-year results for the period ending 31 December 2024, revealing a notable contraction in profitability. Net profit after tax attributable to shareholders fell 42% to $28.5 million, down from $49.4 million in the prior corresponding period. Revenue declined 6% to $342.8 million, while underlying EBITDA decreased 23% to $77.4 million. The company attributed these results to a combination of transitional challenges in Europe and Asia, offset by robust performances in other regions.

Regional Performance Highlights

CTM’s Rest of World (RoW) regions, encompassing North America (NA), Australia & New Zealand (ANZ), and Asia, delivered mixed but generally positive outcomes. ANZ posted an 18% revenue increase to $96.1 million and a 53% surge in underlying EBITDA to $28.5 million, driven by new client acquisitions and the successful rollout of its Sleep Space platform, which enhanced revenue yields and margins. North America saw a 6% revenue rise to $159.9 million and a 49% EBITDA jump to $30.5 million, supported by strong adoption of the Lightning OBT technology and operational efficiencies.

Asia faced headwinds from a 25% decline in ticket prices due to increased supplier capacity, resulting in a 7% revenue drop to $30.1 million. However, new client wins and automation initiatives helped preserve EBITDA at $7.7 million, with management optimistic about stabilising ticket prices and a strong corporate pipeline for the second half.

European Transition and Strategic Outlook

Europe experienced a transitional phase, winding down one-off war-related projects from FY24, which impacted revenue and EBITDA, down 43% and 65% respectively. Despite this, the region secured record new corporate client wins and was appointed sole provider for the UK Government’s Travel Management Company framework starting January 2025. These developments are expected to drive revenue and margin growth in 2H25 and beyond, as CTM balances government and corporate travel segments for sustainable earnings.

Capital Management and Future Growth

CTM continues to execute a disciplined capital management program, combining ROI-focused capital expenditure, share buy-backs, and dividends. Since inception, $59.2 million has been spent on share buy-backs and $77.2 million distributed as dividends. The company declared an unfranked interim dividend of 10.0 cents per share, payable in April 2025. Cash reserves remain strong at $75.5 million with no drawn debt, underpinning financial flexibility.

Looking ahead, CTM plans to leverage automation and AI to enhance operational efficiency and customer experience. The global launch of Sleep Space in 2H25 aims to replicate ANZ’s success across other markets. Historically stronger second-half performance is anticipated to continue, supported by new client wins and stabilising market conditions.

Strategic Implications

CTM’s half-year results reflect the complexities of a global travel management business navigating geopolitical and market shifts. While the profit decline is significant, the company’s investments in technology, client diversification, and operational automation provide a foundation for recovery and growth. The transition in Europe and price pressures in Asia remain risks but also opportunities for CTM to reshape its portfolio and improve margins.