Good afternoon, dear listeners. Welcome to Novaturas' meeting with investors. I'm Emilia from Nasdaq Vilnius, and I'll be moderating today's event. We will 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. As always, I encourage every one of you to ask questions during or after the presentation in the Q&A section. With that said, I'm pleased to introduce today's presenters, CEO Vitalij Rakovski and CFO Arūnas Žilys. Gentlemen, please, the floor is yours, and good luck.
Thanks a lot. Good morning, dear investors. It's a pleasure to have all of you here. Today we'll have our investor call, where we will discuss our financial results of the first half of this year. Together with me, I have our new CFO, Arūnas Žilys, who also joined the company quite recently in the second quarter of this year. To begin with, very shortly, about Novaturas in general. We are at the moment number one tour operator in the Baltics, with more than 20 years of experience in tourism sector. Also, we are traveling to more than 30 destinations worldwide. On top of that, we are organizing more than 100 round trips in Europe.
Also during this half, first half of the year, it allowed us to serve approximately 130,000 travelers, and we generated approximately EUR 90 million of sales. All of that is done by 200 employees who are at the moment working in three different countries: in Lithuania, Estonia, and Latvia. To begin with, our second quarter continued the gradual recovery. During this period, our sales reached EUR 62 million, which is almost three times more compared to the same period in year 2021. Also it even exceeded 2019 levels by approximately 15%.
Moreover, we served more than 92,000 travelers, which is 2.5 times more versus the same period last year, and is very close and in line with our guideline, which we provided for the second quarter. Our guideline was that we were aiming to be close to 2019 levels. As you see in 2019, we served 96,000 passengers. However, soaring jet fuel prices has complicated our recovery from the pandemic, and it basically resulted in a loss-making result in EBITDA line, where we generated -EUR 650,000 loss, and our net profit was also negative by EUR 1.2 million, approximately.
We effectively applied a fuel hedge strategy in the second quarter, using derivatives, and this basically resulted a positive result of EUR 100,000 from hedging activities. However, not all volumes were hedged, and during the second quarter, and according to our estimates, we believe that jet fuel price spikes has resulted a loss of more than EUR 2 million during the second quarter, which corresponds to some 24 EUR per passenger. Going forward, we expect, and reacting to this jet fuel price spikes, we expect to increase our fuel hedge ratio, first of all. Second of all, we want to diversify our hedging instruments and hedging sources, having in mind that volatility in the market is still high. Moreover, the booking window after the pandemic has shortened.
Second of all, some of the jet fuel price increase is already calculated into the purchased trips. All of that allows us to assume and to think that jet fuel price impact on profitability was more of a short-term pain point for us. Additionally, in the first half of this year, almost half of this negative EBITDA result was generated by the various one-off expenses, meaning of roughly EUR 300,000 related to various legal expenses, layoff compensations and additional remunerations. What concerns our product mix. Here the distribution is quite stable.
Approximately 90% of our sales are generated from leisure package tours, and the remaining 10% are distributed among flights only, sightseeing tours, and other minor products. In terms of the situation in the market, the competition and our performance in different markets, I would like to outline a few things. First is that it was quite huge changes in the competitive environment during second quarter of this year and during the whole half a year. 2 tour operators exited the Baltic markets, which is TUI Baltics and Giditure. TUI Baltics was basically terminated their activities due to the sanctions applied to this business. Giditure exited the market due to the strategic decision of the shareholders.
However, on the other side, another tour operator from Ukraine, Join UP!, has entered the Baltic markets in April this year. As we believe, they are still in the market entrance mode and with quite aggressive pricing strategy. Based on publicly available information, Join UP! targets to reach annual volumes of up to 50,000 passengers during this year. As per our estimations, it should account for some 7%-10% of total tour operators market share. Second of all, another newcomer is also operating in the market, which is Coral Travel. This operator is in the market since 2021, and is currently operating in three destinations, which is Turkey, Egypt and Greece.
What concerns our performance by markets, I would say the following, that we did quite good in Lithuania and in Latvia, where our gap versus 2019 levels is in terms of passengers served quite small. It's only 2%. Meanwhile, total group volumes versus 2019 are some -6%. In Latvia, we are gradually strengthening our market position, and we estimate that in the first half of this year, Novatours SIA is likely to be the market leader in tour operator segment in terms of travelers served. However, we did experience some temporary challenges in Estonian market, whereas you see our recovery versus 2019 is not as strong as in Lithuania and Latvia. This is mainly related to constant airline delays we had in Estonia.
We're currently very proactively working and trying to solve the situation by introducing additional air carriers to certain destinations, which is first thing. Second of all, improving the quality of services of existing carrier and with the aim to increase the punctuality and to decrease the delayed flights volumes. In terms of the destinations where we were traveling. As you see, we were traveling from more than 30 destinations during the year. Currently, Novaturas has the widest destination portfolio compared to the second largest market player, who has slightly above 20 destinations, and the third largest market player serves only in three destinations. We believe that this diversified destination portfolio allows us to be very well positioned to withstand any changes in demand of various destinations and also to adapt to consumer preferences.
In terms of most popular destinations. Here the situation is more or less stable, I would say so. Turkey keeps its popularity and accounts for almost 40% of our total sales. The reason behind that at the moment it is best value for money destination among all our selection. Also, Greek Islands continue to show increase in demand. It was partially influenced by the dropping sales in our Bulgarian destination, as in Bulgaria, the prices of hotel rates increased much more versus other European destinations. On top of that, there was much more significant impact on aviation costs flying to Bulgaria due to the overflying of Ukrainian airspace, which is currently closed for air traveling.
Last but not least, demand for Montenegro is gradually increasing, and this destination is among our top destinations. We still are the exclusive tour operator who is traveling to this destination. Montenegro accounts for some 3% of total our sales. As it is indeed a successful destination, we even this year extended the flights to this destination. Originally, it was planned to be finished at some point in September. Meanwhile, we extended flights till the end of October in some of our markets. Jumping to the distribution network. Here we do continue to have a very well-diversified distribution channels.
Our main distribution channel, for a long time, remains the travel agencies, with whom we believe, we have a very long-term relationships, especially with the biggest, agencies in all three Baltic markets. We believe that, it is based on professional analysis and our mutual trust as we have for quite many years in the market and quite trustworthy tour operator, which is quite important in tourism sector in general. Also, we have, dedicated resources, to maintain our relationships with travel agencies. On top of that, we're developing quite actively IT systems, which are used by travel agencies and by introducing, new functionalities and also by improving the existing ones, in order to have more convenient usage for travel agencies. In parallel, of course, our own sales channel is also growing.
Versus the same period last year, our own sales share increased by up to 2% versus 2019, it's up by slightly more than 4%. Shortly about our e-commerce platform. Based on the publicly available information and from the independent sources, our web traffic share among the biggest tour operators is quite high. In Pan Baltic, among the biggest tour operators, we have a web traffic share of almost 60%. As you see, it's almost 2 times higher versus the closest tour operator, closest competitor, and it's even six times higher than compared to the third largest tour operator in the Baltic markets. We indeed have quite strong presence on e-commerce.
All of that basically allows us to generate a compounded annual growth rate in e-commerce sales of roughly 10% compared to this year, 2022 versus 2019. In terms of efficiency and productivity ratios, in the second quarter this year, we managed to reach a load factor of 95%. This is very close to our targeted load factor. It's much better than we had last year. However, it slightly lags versus 2019. Meanwhile, 2019, the load factor was indeed exceptionally good. In terms of sales profit per pax. Sales profit per pax is a gross profit less commission paid to the agencies. Unfortunately, in the second quarter of this year, it was quite low, only 14 EUR per pax.
Meanwhile, last year it was almost EUR 60, and in 2019 it was almost EUR 40. The main effect of such a low profitability came from the jet fuel price increases, which, as I mentioned before, gave us a negative effect of minus EUR 24 per passenger. Average package tour price is increasing, and it's probably not a surprise to all of you. Basically, it comes from two streams, I would say so. First is the aviation part, where jet fuel prices, of course, increased. This is first. Second of all, we need to overfly Ukrainian airspace. It adds additional fuel consumption and additional time spent on air. Second of all, hotel rates are also increasing as general global inflation is quite high, energy prices are increasing, workforce is also increasing.
If to compare with 2019 levels, average package tour price is up by some 20%. Operating expenses in the second quarter and in full half a year were under control and were well managed. Operating expenses totaled to some EUR 3.6 million for the first six months, and it was by 11% lower versus 2019 levels. Despite the fact that we indeed had struggles with the sales profit and we have quite huge pressure coming from inflation, operating expenses are still well managed. Meanwhile, our sales and marketing activities are back to pre-pandemic levels with approximately EUR 2 million of expenses for the six months of this year. Last but not least, is our forward-looking view for the third quarter and year to go.
First is that we are targeting to have average monthly volumes exceeding 25,000 pax for Q3, which for the full quarter should account for more than 75,000. On top of that, I would like to outline the fact that in general we reviewed our capacity levels for the second quarter. Considering the competition in the market and also considering our intention to improve our profitability. Reacting to high jet fuel prices, we would going forward improve our annual capacity planning process. Also we would improve our capacity discipline during the year, aiming to have as less fluctuations and as less changes as possible during the year. On top of that, we intend to maintain the market leader position in all three markets, despite some short-term struggles in Estonian market.
Meanwhile, considering uncertainties in the market, which, as we believe quite a few, potential risk of economic slowdown, potential travel limitations due to COVID-19 comeback and war in Ukraine. We believe that in the year 2023, the company would not expect, and we do not expect significantly higher seat capacity than in year 2022. Also we believe that our view of balanced supply program should stimulate profitability. Coming back to profitability and guidelines. We are targeting on gross profit level significantly higher gross profitability in the second half of this year versus first half of this year. On top of that, we're targeting significantly positive EBITDA for the second half of the year.
Unfortunately, we will not give any further estimations, more precise estimations due to still high uncertainty in the market. To sum up, I would say the following, that we did have indeed good second quarter in terms of volumes and sales, where we met the guidelines, where we exceeded 2019 levels. We did have challenges, short-term challenges with jet fuel prices, and it significantly affected our profitability. However, remaining fundamentals are still strong, so we still have wide destination selection. We have very well diversified distribution channels. We have strong e-commerce platform. Operating expenses are under control. The demand for traveling is there. That's why we look quite positive for the second half of the year and aiming to improve our results quite significantly.
At this point, I will stop and leave time for questions. Thank you very much.
Thank you very much indeed for the presentation. Now we will proceed with the questions. Before that, I would like to remind all the attendees that you can send in your questions in the Q&A box of your screen. At the moment I see that we have no questions. Let's take a minute to wait. It seems that we have quite a few questions incoming. The first question would be: In order to improve profitability and achieve positive profits, the travel prices will have to increase. Will consumers be able to bear such an increase? Thank you.
At the moment, travel package tour prices already are higher. We believe that the demand is there. It's still very strong despite the increased prices. For now, in the short mid-term, we believe so, yes, that consumers would be able to pay such prices.
Thank you. Could you please comment on what is the fuel insurance price?
Not sure whether I understood the question correctly about the fuel insurance, but if it's meant on the hedging itself. We do hedge using various instruments. Maybe Arūnas can help me with this.
Yes. Hello. Good morning, everybody. As Vytautas mentioned that, we have already used various hedging instruments. We would like to maintain the balance between the cost and the benefit and the risk of those instruments. The bottom line is that the average price should be around 5-10 EUR, depends on the instrument, depend on the volumes of insured fuel for taxes, et cetera. At this moment, as Vytautas mentioned earlier, we are discovering new instruments which could allow better to secure the fuel price, but still be on the safe side for the cost of those instruments.
Mm-hmm. Thank you for your answer. Let's continue. Another question would be: any rough indicators on EBITDA in 2022, please? Similar to 2021, way higher or way lower? Will it be still positive? Thank you.
Probably I would just repeat the guideline I said before, that we aim to have significantly higher profitability, positive profitability in the second half of the year, which for the full year definitely should give us a positive EBITDA. On what level? As I said before, difficult now to estimate as there are still few uncertainties, macro uncertainties in the market.
Thank you for your answer. I would like to take a chance and remind everyone that we welcome your questions in the Q&A box of your screen. The next question would be: what is the reason for not hedging all of the fuel volumes in such volatile environment?
It's a part of the hedging strategy. The hedging strategies differ among various aviation companies and between the various tour operators. Novaturas historically and at the moment was not using any excessive, let's say, hedging strategies versus the market average. If to look on the other listed companies and other companies in aviation which are providing their information on how they hedge. As was said before, probably nobody could have expected that the prices would hike so much. That's why going forward we would probably, as I said before, would adjust our hedge ratio and definitely would increase it.
Thank you for your answer. Could you please comment on what is the percentage of hedged fuel travels was in first half and plans for the second half?
Maybe I can answer that. Based on our hedging policy, the difference between the periods, but it was around 30%-40% of travelers. At this moment, we are strongly reviewing the hedging policy in order to maintain the more secure level for the fuels and maybe increase, as Vytautas mentioned, the ratio of insured travelers in terms of the fuel prices.
Thank you for your answer. It seems that, we have the last question for today, which would be as follows: how much did the fuel surcharge contribute to the profitability?
It allowed to diminish the loss, I would say so. The effect we mentioned is net of fuel surcharge already.
Thank you very much. We are now waiting for more questions.
I see one more question about the hedged fuel price. What is the average hedged fuel price? We are hedging fuel month by month, dependent on the size of the program of the taxes for each month. We cannot say the exact number of the price for exact months, but it's hedged fuel market price for every month.
Thank you for your answer. It seems that we covered all the questions for today. On behalf of Novaturas and Nasdaq, thank you all for joining us today. Dear management, thank you very much for the informative session. The recording of the webinar, as always, will be available in the Nasdaq Baltic YouTube channel and company's announcements. Have a good day, everyone, and goodbye.
Thank you very much. Goodbye.