Monday, December 6

The IBEX 35 tourists sharpen their post-pandemic recovery

The results season in the IBEX 35 reaches its final stretch and now it is the turn of the listed companies linked to tourism, the most affected by the pandemic.

IAG, Meliá and Amadeus they will present their accounts to the market this Friday. They will remain in the red, but the greater reopening of the sector in the third quarter allowed them to reduce the losses left by the health crisis in the first nine months of last year.

In any case, the figures of these companies focus the focus of investors, especially after the risks brought by the threat of the delta variant and the impact of the rise in fuel prices.

IAG halves losses

The IAG airline group, the tourism with the highest volume of the IBEX 35, halved the losses that it dragged between January and September 2020.

Iberia’s parent company obtained a negative net profit in the third quarter of 570 and 640 million euros, according to the consensus consulted by Taking into account that in the first half of this year it lost just over 2,000 million, this would raise the losses in the first nine months of 2021 to between 2,600 and 2,700 million.

However, the figure would remain more than 50 percent below the 5.5 billion it lost in the same stretch last year.

“Relief for IAG by the reopening of transatlantic routes on November 8 may be overshadowed by the increase in Covid cases, fuel prices and plans for airports, including Heathrow, to increase rates,” explain the Bloomberg Intelligence analysts.

“After 18 very difficult months, there are reasons to be more positive about IAG for the trips that will resume on November 8th. However, we reduce our profit forecasts due to higher oil prices, although the leverage is still very high compared to the rest of the European airlines ”, details the latest JP Morgan report on the European airline sector.

In the income section, IAG added 2,700 million in the last quarter according to the consensus, which represents a figure higher than the income obtained in the first six months of the year, of just over 2,200 million.

The latest news from the group invites optimism: IAG announced a loan of 1.1 billion to British Airways, which will help correct the red numbers of one of the flagships of the airline conglomerate.

From next year it will also have a new CFO following the departure of Steve Gunning, the manager who managed the group’s journey during the pandemic.

Meliá bridges the gap

Meliá will also alleviate the impact of Covid-19 after benefiting from the greater influx in summer and despite the fact that the high season for the hotel usually arrives in the fourth quarter.

A September 4 Income report, prepared from conversations with the company’s leadership, highlighted the good evolution on the Spanish coasts despite the lower arrival of foreign tourists.

“Although the occupancy has been lower, around 60 percent compared to the average of 80%, prices have been similar to those of 2019,” they explained in Renta 4, who expected the summer season to lengthen during the months September and October.

Meliá will lose 37 million in the quarter according to consensus forecasts, which together with the 150 million in losses in the first semester, will raise the red numbers until September to 190 million, 60 percent less than the 470 million it lost in the first nine months of 2020.

In this sense, the CEO of the hotel, Gabriel Escarrer, already anticipated in July that it would be necessary to continue waiting at least a couple of years to recover the figures prior to the pandemic, but the company could return to quarterly profits between October and December as predicted by the panel consulted.

Respite for Amadeus

Of the IBEX 35 tourism companies, the Amadeus reservations group will be the only one to emerge from the quarterly losses: the consensus indicates that it will obtain around 40 million in net profit compared to the losses of just over 100 million registered in the first half of the year.

Between January and September, Amadeus would have lost about 65 million according to analysts’ estimates, but the figure would drop 80 percent from the 400 million it lost in the same period last year.

The leadership of the board of directors assured in July that the business continued to be affected by the “strict restrictions that governments around the world are imposing.”

However, beyond reservations, Amadeus is a leading provider of services for tourism businesses, so that diversification could return benefits for the first time since the pandemic began. Already in June, the last month with published data, it obtained the best revenue figures since March 2020.

IAG shares, the favorites

Despite the persistence of the Covid throughout the year, tourism stocks registered a good performance: IAG and Meliá added 20 percent in the accumulated of 2021 while Amadeus turned around in recent weeks and now adds 1 percent hundred.

But it’s the airline group titles that remain market favorites.

The consensus consulted gives it a potential of 27 percent, which would bring its securities to 2.55 euros compared to the 2 in which IAG is listed now. A potential greater than 4 percent that marks the panel for Amadeus and the negative potential that they grant to Meliá.

In the chapter of recommendations IAG is also imposed. It has 65 percent positions in favor of the purchase and 33 percent neutral. Maintain is precisely the majority option of analysts over Meliá and Amadeus, with 45 percent of positions in favor.