Yellow Balloon Tour returned to profitability in the second quarter, posting positive operating and net profit figures despite a drop in sales.
The travel company said Friday its second-quarter consolidated sales came in at 19.3 billion won ($13.6 million), with operating profit of 773 million won and net profit for the period of 586 million won.
Second-quarter sales fell 21.0 percent from a year earlier. Both operating profit and net profit for the period swung to positive territory, however, after the company recorded an operating loss in the second quarter of last year.
First-half consolidated sales totaled 48.91 billion won, down 11.8 percent year on year. Operating profit reached 3.15 billion won and net profit for the period came to 2.7 billion won. The results reflect the company's success in defending profitability by cutting unnecessary expenditure even as revenue declined.
"We faced difficulties securing demand due to external factors including geopolitical instability in the Middle East, rising fuel surcharges and weakening consumer sentiment," Yellow Balloon Tour said. "We responded by adjusting product and flight supply in line with market shifts and reducing costs."
First-half operating expenses fell 17.5 percent year on year to 45.76 billion won. Sales commissions rose 19.3 percent to 10.17 billion won, while advertising and promotional spending dropped 30.9 percent to 3.65 billion won — a shift the company attributed to cutting fixed advertising outlays in favor of performance-based channel sales.
Total airfare costs fell 43.3 percent to 7.71 billion won. Penalty losses declined 41.1 percent to 546 million won, and other expenses dropped 63.4 percent to 853 million won.
Yellow Balloon Tour said it kept related costs in check by flexibly adjusting seat inventory and product supply to match market demand.
"In the second half, we plan to continue operating product and flight supply flexibly in response to market conditions and demand shifts, while expanding reservations through sales channels and pursuing cost efficiencies to sustain profitability improvement," a company official said.
terry@heraldcorp.com
