Transat A.T. Inc. Sharp Increase in Net Income



- Earnings per share for the quarter rose 24%
- Second quarter revenues increased 16% to reach $689.7 million
- Strong demand in Canada and acquisitions boosted revenues to close to $1.2 billion for the first six months - a record for the Corporation

During the second quarter, Transat A.T. Inc., the leader in the vacation travel industry in Canada, recorded net income before goodwill charges of $17.5 million for the quarter ended April 30, 2001, compared with $13.9 million last year, and net income of $16.5 million ($0.51 per share), compared with $13.3 million ($0.41 per share) last year, an increase of 24%. Revenues for the quarter reached $689.7 million, an increase of 16% over last year revenues of $594.6 million.

'We are very satisfied with these results, which reflect both dynamic growth and an improvement in margins, our two main priorities,' stated Jean- Marc Eustache, President and Chief Executive Officer of Transat. 'The increase in revenues is mainly due to strong demand and increasing prices, especially on the Canadian market where we continue to grow, as well as to our acquisitions,' he added. Transat's French subsidiaries also contributed to the group's growth.

With regard to profitability, the Corporation succeeded in increasing its contribution margin, despite unfavourable factors such as the high cost of fuel and a strong U.S. dollar.

For the six-month period ended April 30, Transat recorded revenues of $1.2 billion, compared with $992 million for the same period last year, an increase of 21%. Net income before goodwill charges reached $17.7 million, compared with $14.0 million last year; while net income reached $15.9 million ($0.49 per share), compared with $12.7 million ($0.39 per share) last year, an increase of more than 25%.

'The excellent performance of the first six months reinforces a very sound financial position, a position that will enable us to continue our growth strategy, including future acquisitions. At the end of the quarter, our cash and cash equivalents were $162.4 million, compared with $147.4 million at October 31, 2000,' indicated Mr. Eustache.

Transat increased its interest in the tour operator World of Vacations to 100%, a transaction now completed and approved by the regulatory authorities. The Corporation also made two major acquisitions: Rêvatours, a Quebec tour operator specialized in upscale tours in Asia, Eastern Europe, and the Mediterranean Basin; as well as a 40% interest in the incoming Greek tour operator Tourgreece. Finally, the Corporation expanded its distribution network in France and Canada by purchasing a certain number of travel agencies. These acquisitions are in addition to that of a 50% interest in the incoming tour operator Jonview concluded during the first quarter of the current year.

In Canada, competition remains strong for the next summer season, especially for departures to Europe, which are affected by overcapacity on the Canadian market and a weaker economy. Nevertheless, the level of bookings is encouraging.

In Europe, the value of the euro could affect the demand for tourist products for North American destinations. For its part, Look Voyages' level of bookings is good, and on the rise compared with last year.

About Transat A.T. Inc.
Transat A.T. Inc., with its head office in Montreal is an integrated company specializing in the organization, marketing, and distribution of holiday travel. The core of its business consists of tour operators in Canada and France. Transat is also involved in air transportation, hotel management, and value-added services offered at travel destinations as well as in distribution through both travel agency networks and e-commerce initiatives. Transat is a public corporation listed on the Toronto Stock Exchange (TSE:TRZ). In 2000 Transat recorded revenues of $1.9 billion.