Good morning, dear listeners. Welcome to Novaturas Investor Relations Conference. I'm Emilija from Nasdaq Vilnius, and I'll be moderating today's event. We'll start with the presentation from the management, which will be followed by the Q&A session. Please be informed that this webinar is being recorded and will be available on the Nasdaq Baltic YouTube channel. I encourage everyone to submit questions in the Q&A section at the bottom of the screen. You can submit them either anonymously or with your name. With that said, I am pleased to introduce today's presenters, the CEO of the company, Kristijonas Kaikaris, and the CFO, Vaidrius Verikas. Please, the floor is yours.
Thank you very much, and a very good morning, dear investors and guests. I'm very pleased to have you all here today at the review of Novaturas' 2024 first quarter performance. Let me start with a summary. Let me change the slides. Let me start with a summary, which shows that the first quarter of 2024 was really a challenging one for tour operators business. Novaturas has experienced a 10% decrease in income, primarily due to two factors. First factor was the ongoing Gaza conflict, which began in the fourth quarter of 2023, and as we all know, continued into Q1 of 2024. This situation has resulted in the complete suspension of the trips to Israel and Jordan, and a reduced travel share in Egypt.
The second factor was increased competition among tour operators in the Baltic region, that led to an oversupply of vacation travel packages, which were offered in the market at the lower prices. The financial impact on Novaturas is further reflected in our EBITDA. For the first quarter of 2024, EBITDA stands at EUR 316,000, which is a significant decrease of 83.3% compared to the same quarter last year. The decline underscores the combined effects from the Gaza conflict and increased competition in the Baltic region, which has put a considerable pressure on our financial performance.
On a positive note, we have seen improvements in our operational efficiency, and the number of flights delayed over three hours has decreased by four times compared to the same period last year, and now representing less than 1% of total flights. This improvement really highlights our commitment to enhance the travel experience to our customers. This efficiency, I want to say, has contributed to our customer satisfaction, with the Net Promoter Score steadily growing and reaching a commendable 53% by the first quarter end. Furthermore, we are making strategic changes in the organizational structure. A new C-level HR manager has joined Novaturas in March, and she will oversee organization's HR management and labor relation policies, practices, and also focus on the one of the key components of our strategy, which is employee engagement.
Another C-level management change is Vaidrius Verikas, who replaces Vygantas Reifonas in the role of Chief Financial Officer. So for the new CFO, now I would like to welcome Vaidrius, to take the stage, with a review of our Q1 financials. Welcome, Vaidrius.
Hello, everybody. Nice to meet you and to be a part of Novaturas Group. Today I will present financial results, financial part of this our presentation. So, please, next slide, Kristijonas. And how Kristijonas already mentioned, first quarter of 2024 had a 10% decrease in revenue compared to the first quarter of last year. This was mainly caused due to unrest in Gaza Strip. On our best estimate, we estimate that revenue decrease from Egypt, Jordan areas and destinations amounted EUR 3 million-EUR 3.5 million of lower revenue compared to quarter one of 2023.
Saying that, we still have a significant increase from 2022, meaning that our volumes and revenue and destinations are increasing after the COVID and having the good pace now. From pax served, we see marginal decrease, but as mentioned before, it mostly relates to Egypt part. Talking about our EBITDA and the split of it, we see EUR 1.6 million decrease compared to 2023. If we would go to higher, deeper level of the breakdown of it, out of that difference, about EUR 300,000 was related to larger commission expenses due to our need to have more favorable conditions for our sales agents and that competitive market.
About EUR 300,000 was attributed to increased operational expenses, where we wanted to have more competitive also, more competitive position for our employees and salaries. And remaining EUR 1 million of EBITDA could be attributed to aviation expenses as well as market competition challenges. Meaning that in 2023 first quarter, we had favorable momentum of decreasing aviation fuel prices. As well, we were able to sell our packages with higher cost, higher revenue compared to the situation we had in 2024. And we can also have a positive note that we managed to optimize our flight destinations as well as the number of flights that we were planned and did.
This led to very high level of 97% load factor, and managed to have sales profit per pax at EUR 66 , at EUR 66 . Talking about expenses, please, next slide, yeah. Our overall sales and admin expenses increased around 10%, where I mentioned before, commission expenses, despite the fact that we served a lower level of passengers, still were on almost identical level. This led to competition and increased favorable conditions for our sales agents. So, our overall structure of expenses and the distribution of it compared to previous years did not change significantly.
However, due to unfavorable conditions, our overall share of expenses compared to revenue increased from 5.3% to 7%. Yeah, going even more talking about markets distribution or in 2024 first quarter, Lithuania business did 44% of overall revenues. Estonia 28%, and Latvia also very similar range. I want to mention here maybe that the situation in Estonia is having... economical situation in Estonia is also having an impact to our Novaturas numbers.
We see a decrease in pax served in Estonia, while Lithuania and Latvia are on similar levels compared to previous year. Expense-wise, our supporting functions costs are reallocated two times a year. Thus, in the first quarter, we see higher expenses in Lithuania and lower in Latvia and Estonia, and this will be adjusted in second quarter. Yeah, I'm passing now information about pax in more detail to Kristijonas.
Okay. Thank you, Vaidrius, very much. So let's look deeper into the passenger trends in Q1, where we have observed stable numbers in Latvia with 10,000 passengers. Meanwhile, Lithuania saw a slight decline to 10,800, and while Estonia experienced a drop to 8,500 passengers. And as Vaidrius mentioned, it's basically it highlights the variations of different market dynamics across the Baltic countries. We have reduced our dependency on Egypt decreasing from 47% to 42% and expanded into new destinations. And this diversification strategy is critical, especially given the decreased demand due to the Gaza conflict. And now we offer more long-haul destinations increasing from seven in Q1 2022 to 12 in Q1 this year.
Notably, our passenger share for United Arab Emirates grew from 3% in 2023 to 5% this year. And we expect significant potential for our upcoming winter season in this destination in United Arab Emirates. Additionally, Cyprus and the Canary Islands remain stable, further enhancing our portfolio, our destination portfolio. Analyzing data a little bit, so Lithuania had a slight growth over three years, reaching 17,200 passenger in Q1 2024. Latvia maintained stable numbers, with slight increase compared to 2022. Then Estonia saw a decline from 11,100 in 2022 to, as I mentioned, 8,500 this year. And again, this data reflects varying pace at which mass winter destinations are being diversified within each country.
So in conclusion, while we face significant, significant, challenges in Q1 this year, 2024, our efforts to diversify destinations and also improve operational efficiency are paying off. We are committed to enhancing, enhancing customer satisfaction and also adapting to the market dynamics to ensure our company's sustainable growth. Moving to the next slide. Looking at the customer perspective, let's see the booking behavior and also the Net Promoter Score. So examining travel purchase habits over past first quarter, first quarters of three years, we observe the following. So first observation is a decrease in bookings made less than three months in advance from 85% in 2022 to 77% in 2024.
The second observation is the increase in bookings made more than three months in advance, which shows the sales depth, as we call it, from 15% in 2022 to 23% in 2024. This shift, I can say, indicates the growing tendency among our customers to book their travels earlier, reflecting a greater confidence in our services and the effectiveness of our advanced booking initiatives, what we had. Looking at Net Promoter Score, which is a key indicator of our customer satisfaction and loyalty, in Q1 2023, our NPS was 37%, and I'm very pleased to report that by Q1 2024, we have increased the score from 37% to 54%. This steady improvement reflects, again, on our continuous efforts to enhance customer experience across all the touch points.
Breaking down the Net Promoter Score by market, for Q1, this year, Lithuania achieved a commendable 57%, Latvia outperformed with impressive 65%, and Estonia showed very significant improvement, raising from a very low number, which was 11% in Q1, 2023, to 44% in Q1, 2024. So Estonia has shown real recovery in Net Promoter Score, and the notable growth in Estonia is particularly encouraging. It highlights the positive impacts of our efforts to improve primarily flight punctuality, OTP performance, and of course, overall service quality. Looking at the priorities, how which destinations our customers choose, so we are basically rating at the highest in Q1, 2024, destinations of Sharm el-Sheikh and Hurghada, which is, of course, Egypt.
Fourth, third is Tenerife, and fourth, Arab, United Arab Emirates. And notably, Egypt remains slightly above average in terms of, customer ratings and, reinforcing, its status as the favored destination across all three Baltic countries. Moving to the second slide of customer perspective. So, as I already mentioned, we have made notable progress in, improving our on-time performance and reducing long delays, even, in the face of a challenging winter conditions. And our consistent efforts to enhance operational efficiency are evident, in these positive results, reflecting our dedication to provide reliable and timely services to our customers. We have maintained a steady OTP, on-time performance, of 78% in Q1 this year, which is comparable to the same period last year.
Despite seasonal challenges presented by the winter weather conditions, which necessitated additional de-icing procedures, as it happens when, you know, we have cold and snow winter, we have managed to keep our performance consistent, you know, from first quarter last year to this quarter. And you can see here, in this slide, that we have achieved significant improvements in reducing flight delays. The number of flights delayed by over three hours has decreased from four in Q1 last year to just one in Q1 this year, and the reduction is a very positive outcome, particularly given the ongoing impact of winter weather. However, I have to mention that the shorter delays, those under three hours, have slightly increased from 73 to 84, compared, of course, to the same period of last year, and from 78 to 84, compared to the last quarter.
Meaning Q4 2023, when we last met, in this presentation. Looking back over the past year, our time, on time performance reached a peak of 93% in Q3 2023, while Q1 this year and Q4 last year showed a slight decline due to seasonal factors, maintaining around 78%-80% OTP, which is a strong indicator of, again, our operational resilience and commitment to punctuality. Looking at distribution, while we have faced challenges with the web recovery, our strategic, strategic shift, towards enhancing our own retail channel has yielded, positive results. We remain committed to refining our distribution strategy to ensure a sustainable growth and improved customer satisfaction. Following the launch of our new website in August 2023, we have, encountered more challenges, in recovering web sales than initially anticipated.
In Q1 this year, web sales were still down by 42% compared to the first quarter of the previous year. But there is a positive note. The decline has been stabilized, and we observed 0.3 revenue share increase from Q1 2023 to Q1 this year. And of course, our e-commerce team is fully focused on fostering this recovery. And to mitigate the challenges of our new web page and web sales, we have concentrated our efforts on growing Novaturas' retail share. And this strategy has resulted in a significant increase in own retail revenue share from 15.5% to 17.8%. And this growth is notable achievement within the relatively short period.
So the shift of a strategy, knowing that, we cannot recover, the sales of our, new launched website, that strategy shifting to the direct sales really paid off. At the same time, the share of, revenue from our partners, such as travel agencies, has decreased to 70.9%, so we have the re-distribution of the channels, increased the direct sales. Consequently, indirect sales are going down, and this shift underscores our strategic emphasis on developing and, also strengthening our sales, our own sales channels. Moving forwards, the development and, strengthening of our own channels, including both retail and web, will continue to be a priority for Novaturas in the upcoming months. And by focusing on these areas, we aim to gain greater control over customer experience and also improve our profit margins.
Our strategy is designed, you know, to build a more robust and resilient business model that can adapt to market changes and, customer preferences in the dynamic, tourism industry. Continuing the next slide. Well, we have maintained a leadership position in web traffic, even though the problems, you know, with our new website, and we captured 38% of total traffic. This significant share demonstrates the effectiveness of our digital marketing strategies, but of course, it's affected by the issues what we are trying to fix on a new website. But still, we maintain the leadership position, which is a very good achievement, considering the issues. In the first quarter of 2024, we focused on several key developments to enhance our website performance and user experience.
So the first one was ensuring our website runs smoothly without interruptions, providing a reliable platform to our customers. Second, is enhancing the search functionality to help our users, our customers, find relevant information and options more effectively, efficiently. Third one, introducing labels to highlight sustainable practices, sustainable hotels, and exclusive features of hotels, catering, you know, to the growing demand of eco-friendly and unique travel experiences. The fourth one, streamlining the checkout process to make it faster and more user-friendly, reducing cart abandonment, you know, rates. And the fifth one, upgrading our payment system to ensure secure and seamless transaction for our customers. So in conclusion, we have made significant strides in maintaining, you know, web traffic leadership, enhancing our website's functionality, and growing our retail channel.
These achievements reflect our commitment to provide exceptional service and to meet the evolving needs for our customers. Looking forward into this year into the upcoming quarters. So, for 2024, we anticipate serving between 220,000 and 240,000 passengers. This projection has been adjusted from our previous estimate, what we presented last time, of 240,000-280,000 passengers due to oversupply of seats in the Baltic market, which leads to decreased prices. Consequently, our revenue forecast for 2024 is in the range of EUR 180 million-EUR 200 million. Given the current market dynamics, we do not expect to match the last year's results.
Our forecasted EBITDA for 2024 is between EUR 2 million-EUR 3 million, while our net profit is projected to be in the range of EUR 0.5 million-EUR 1.5 million. These figures reflect the challenges and opportunities we anticipate in the upcoming year. To navigate the challenges and achieve our goals, I want to outline several tactical objectives. So the first one, we aim to improve the efficiency and service of our sales channels to better meet customer needs. Second, our revamped website will further enhance and ensure ease of use for customers and partners, providing a seamless digital experience. Third one, we will continue to offer a wide selection of destinations, giving us the competitive edge and helping us to balance the profitability.
Fourth one, focusing on customer-centric, data-driven efficiency, we will restructure our organization to better support these objectives. Fifth one, introducing additional services to provide more value to our customers. And the sixth one, we will continue to enhance the customer experience with new digital solutions, making interactions more convenient and, more engaging. And with this, I would like to conclude our presentation and invite you to Q&A session. Thank you.
Thank you for the presentation. We will now proceed with the questions. Before that, I would like to remind everyone, you can submit the questions in the question box on the side of the screen. The first question we received is regarding the lower number of passengers. It is primarily due to the optimized travel offering to Turkey and Egypt, where profit margins are usually lowest due to intense competition. Could you please elaborate on which tour operators push Novaturas the most, and why?
Well, it's very dynamic. I cannot name one or even two tour operators because, you know, they basically... everyone is staying in one line and doing different efforts, trying to really push the sales of the oversupplied seats in the market currently. So, sometimes we do push, sometimes other guys are pushing. So it's very, very dynamic. But of course, you know, the tour operators which recently appeared in the market, they are becoming, you know, more active and more aggressive, which makes the prices go down. But again, everyone is looking at the prices and, you know, seat availability and is trying to do the best with optimization, the same as we do.
Most of other operators, they follow the same path.
Thank you. The following question is: What are the main sources of income and profit growth during Q2 and Q4 and beyond? How do you plan to grow profit margins?
It's challenging at the moment due to competitive situation. But as I said, you know, everyone is looking for optimization because, you know, the rules and the market is the same to everyone, I mean, to all, you know, tour operators. So as I mentioned in our objectives for the upcoming months in the last slide, we are adding... we will be adding some new value-added services to our customers. As an example, you know, eSIM service and other additional services which our customers are in need or usually looking for during the period of the trip. So this is one area.
Another area, it's, you know, being very dynamic and active in, providing the right supply of hotels and the price ranges in the destinations where the competition is the highest. So, we have very experienced team with a lot of know-how, brave team trying, to do all the best, working very closely with, our destination management companies, partners on destinations to achieve, to find, you know, the best suiting offers and of course, availabilities in those destinations. It's everyday effort, I have to admit, in such a dynamic market, but we are fully focused there.
Thank you. The next question is about the website. Could you please help understand what is causing challenges in the digital transformation journey, and why the launch of the new website is proven to be challenging?
Mm-hmm. So apart from, you know, so-called, you know, organic issues, when you change the website, it's not being found and recognized by search engines immediately, so it takes some time to, you know, optimize the SEO and, you know, all the other website parameters. So our customers, when they enter the keywords and, you know, they can find our new website... So at the beginning, it was one of the issues, but I think the main challenge was underestimation of the complexity of the e-commerce solution for the travel industry, for the dynamic travel industry. And basically, I have to admit that certain mistakes were done on our and our suppliers' side.
So now we are fixing, you know, those, those issues, those mistakes, which proves successfully successful at the moment, not that fast as we would like to. But again, as I have shown comparison between Q4 last year and Q1 this year, 2024, we managed to stabilize the decline because, you know, the website was still declining. If it doesn't work properly, you know, customers are not happy to use it, so less customers, less traffic. So we have stabilized and it started to grow. We have a separate project, a dedicated team to work on the issue tickets, to solve them, and of course, in parallel, also to enhance and improve user experience, customer flow, and all the other things what I have already mentioned.
So, in summary, you know, the decline is always an organic thing when you do better placement, but it lasted too long because of underestimation of the complexity of, you know, travel industry, e-commerce solution.
Thank you. The following question is on Tez Tour. So based on your 2023 sales figures, it seems that your rival Tez Tour is gaining incremental market share in Lithuania. Could you please share your insights on what helped Tez Tour do that?
Well, I'm a bit reluctant, you know, to comment on the Tez Tour, you know, efforts, but as already a couple of years ago, Tez Tour was gaining, especially on the popular destination, which is in Turkey. But again, for us, our main priority is not the market share. For us, main priority is a profitable operation, and maintaining market share comes at a high cost, right? And therefore, we set our priority, and we allow a market share shift sometimes, and in Tez Tour case, negatively for us. But the more important part of our strategy is keeping profitable operations.
Thank you. The following question is on the auditor's opinion. So in the auditor's opinion, other information section, we were not able to obtain sufficient, appropriate audit evidence in respect of differences identified in confirmation letters and confirmation letters not received, an impact of this matter. Could you please elaborate more about the situation? Is this the normal case of each year, or is it something different? And was the change of the CFO the result of the auditor's report opinion?
These things happen, and I want to emphasize that, if we look at 2010-2013, the last year for the audit, so, everything was in line. All the numbers were identified and synced with our suppliers. So the problem came from the previous years. So, we had to fix it. And, maybe, Vaidrius, you can elaborate a bit deeper into the issue and the details.
Mm-hmm. I can try to elaborate a bit deeper. Basically, the confirmation process of balances between parties was not done before after the COVID period. So it's the first time we are doing that, we were doing that. And there were some unfinished confirmation procedures between parties, and this will be ongoing situation in 2024, where we'll try to finish the confirmation procedures because it's a complex matter. However, we believe that our numbers are correct, and we do not have any legal, let's say, questions and legal discussions with other parties about the balances itself.
To answer the second part of your question about the CFO change. So it was the previous CFO decision to look for opportunities outside Novaturas. But again, I want to note that our previous CFO, Vygantas, he made everything for 2023 in this area fully in line and verified the numbers and have all the agreements, you know, with the partners on the payments or credits. So everything is okay here. And as Vaidrius said, you know, it comes from the COVID and pre-COVID period.
But changes in management and in employees happen in all organizations because, you know, the market is very dynamic, and we believe that, you know, with Vaidrius' joining us, we will come up with a lot of, you know, new ideas based on his experience and his motivation and optimism in this area.
Thank you. The following question is on the dividends. Is there any hope for dividends for 2023 or, or not?
I wouldn't... I don't want to leave you with false expectations. I want to be very clear and open here. So, again, the main reason is that we cannot pay the dividends now, as it was articulated from our side, because of the conditions what we have with the bank. So we are working with the bank to restructure, you know, our payment and credit scheme, and looking into the solutions. So, I cannot say now, yes or no. So we, we're doing all the efforts what are possible in our hands. Also, looking at the market dynamics and competition, to really create the value for the shareholders, long term.
So, a lot of things are on the table for us to try to manage in the right way. But again, our main focus is the shareholder value for the long term.
Thank you. It looks like we've covered all the questions so far. If you have not seen a question yet, please do so now.
So it looks like no more questions?
As all questions have been answered, on behalf of Novaturas and Nasdaq Vilnius, thank you, everyone. It was a pleasure being with you today. The recording of the presentation will be available on the Nasdaq Baltic YouTube channel. Kristijonas, Vaidrius, thank you. Have a great day.
Thank you so much.
Thank you to all the investors, to the guests, for participating, for being active, asking questions, and we're looking forward to upcoming quarters. So see you and hear you rather soon. Thank you.