Thursday, February 21, 2008

What role did the Karavel sale play in Opodo's recent profit announcement?

At the beginning of Feb we heard the good news that Opodo was in the black for the first time with Euro 6.6mm in net profits on the back of Euro 1.3 billion in gross bookings.

Just today I spotted that Travolution are carrying a brief interview with Opodo CEO Ignacio Martos. It was published just after the announcement and Ignacio was talking about the results. He admitted that the sale of Karavel to Barclays "contributed to the net profit number". Does not say how much it contributed.

The leak that hit the internet was that the Karavel sale would net Amadeus (who control Opodo) Euro 40mm. So what does this mean. One reading is that maybe taking away the costs of operating Karavel helped contribute to the Opodo bottom line, dropping costs and contributing to profiability. Another (more dangerous reading) is that it was the profits from the sale that pushed Opodo into the black, not general trading activity. No way of telling which until we see broken out numbers but is very interesting to speculate about. If this is true (and I am not saying it is) then would mean that Opodo is still losing money at an operational level. hmmm....

Kevin or anyone out there from Travolution world know any more?

UPDATE - a source has told me that people inside Amadeus were surprised to hear that Opodo was profitable. That as far as they (these people inside Amadeus) knew Opodo was losing money in 2007. Could add credence to the notion that it was non-operational matters (ie once off) that generated the profit. I repeat myself - this is all innuendo and conjecture at this point.


AlastairMck said...

Blimey! So not really 'in the black'...... even now?

I can't remember exactly when I was sitting in the IMAX at Waterloo listening to that nice Mr Bisignani at Opodo's press launch explain how they dreamed up the name..... but I'm sure when I came out I saw square-riggers on the Thames and Artful Dodger types in frock coats in the underpasses!

How long does it take these days before investors wonder if their own deep pockets aren't being 'felt'?

Tim Hughes said...

I remember that day as well - late 2000 (pre electricity in Internet terms). A fanfair of press releases and media junkets. Again I don't know for certain what Ignacio's comment meant but it is always interesting when there is chance that a non-operational (ie irregular) element contributed to profitability. Either way it has been a long slog for the various owners and cheque writers