KEY POINTS:
Tourism Holdings has warned profits for its 2009 year will be "well below" last year's figure as the tourism sector feels the bite from the global economic crisis.
Chairman Keith Smith told shareholders at yesterday's annual general meeting that based on booking trends and the weak first quarter
it expected to report a small trading loss for the six months to December 30, although it would still make a small profit based on asset sales.
In the six months to December 2007 its net profit was $4.9 million.
Smith said it was too soon to predict a full-year result but it would be significantly lower than the previous two years.
"We expect a very challenging second six months as well but are unable to fully quantify the impact on the year end at the point, however, NPAT (net profit after tax) for the year will be well below last year's $14.3 million," he said.
Chief executive Trevor Hall reinforced the chairman's predictions. "We are in tough times as the global economy, the New Zealand and Australian tourism industries and of course Tourism Holdings, all face uncertain and challenging economic conditions."
Hall said latest booking data indicated its Australian business was down 9 per cent on last year while its New Zealand business was down 13 per cent, reflecting New Zealand's smaller domestic market.
Tourism Holdings owns Waitomo Caves as well as campervan manufacturer CI Munro and campervan rental businesses Britz and Maui.
Hall predicted New Zealand's tourism industry would be down by more than 10 per cent over the next year.
But he cautioned against panic.
"I don't think there is a need to panic because there has been no reduction in the flight capacity to this particular part of the world. If they keep filling the planes we will continue to see the numbers."
Hall, who steps down as CEO next month and leaves the company in March, said a sell-down in non-core assets over the past 15 months had left the company in a good position to cope with the tougher times.
The sales brought in proceeds of $69 million which have helped the company to reduce its debt levels from $89 million to $51 million.
The company was also looking at further ways to cut costs.
Hall said it had already restructured its management and was looking to make further redundancies before Christmas, although he would not put a figure on the numbers to be cut.
The changes to the company's structure were expected to reduce costs by $1.7 million.
Hall said the fall in the New Zealand dollar as well as increased air capacity expected to be brought on next year would help the tourism industry.
But he called on the incoming Government to engage with the industry as soon as possible.
Before the election Prime Minister-elect John Key said he would take on the tourism portfolio if elected.
Hall will be replaced by present chief operating officer Grant Webster.
