Present for the First Half of 2025 Financial Results. I'm Simona from Nasdaq Vilnius, and I'll have the pleasure of moderating today's session. Thank you for taking time to join us today. We'll provide you with comprehensive insights into Novaturas' financial performance and strategic outlook. Before we begin, a few quick notes. This session is being recorded and will be made available on the Nasdaq Baltic YouTube channel shortly after we conclude. We encourage you to submit your questions using the Q&A function located at the bottom of your screen throughout the presentation. We'll address these during our dedicated Q&A session following the management presentation. I'm delighted to introduce today's presenters, Kristijonas Kaikaris, Chief Executive Officer, and Auksė Kriaučiūnaitė, Chief Financial Officer, who will take you through the company's performance and answer your questions. Without further delay, I'll turn the floor over to our management team.
Kristijonas and Auksė, please proceed.
Good morning, dear investors and guests. As I was introduced, I am Kristijonas Kaikaris, CEO of Novaturas, and I would like to welcome you to our half-year 2025 results presentation and conference. This year, we present our results under slightly different circumstances. Our CFO, Darius Undzėnas, as it was informed publicly, has left the company, and today I'm joined by our Acting CFO, Auksė Kriaučiūnaitė. She has stepped into this role with strong commitment and energy. Together, we will guide you through both the financial and operational results of our first six months of the year, highlight key developments, and share how we are preparing for the future. The past year has been one of transformation. We faced a highly competitive market environment, oversupply across the Baltics, and shifting customer behavior.
Yet, through decisive actions, by adjusting our capacity, refining our product mix, and also strengthening our partnerships, we are steadily improving. Let's begin today's presentation with the executive summary. Looking at the first half of 2025, which reflects both the challenges and adjustments, and the rewards of our operational discipline, we generated EUR 74 million in revenue and an 18.8% decline compared to the previous year. On the surface, it looks like a contraction, but in fact, it is a direct outcome of our decision to streamline the travel programs and step away from last year's unsustainable oversupply, especially during the summer months. The result is a company that is smaller in volume, but already healthier and more profitable. This is visible in our bottom line. EBITDA improved significantly from -EUR 1,665,000 last year to just -EUR 254,000 this year. Net profit also followed this path.
Losses narrowed by 65.3%, improving from -EUR 2.277 million to -EUR 0.791 million. These are not yet positive figures, not up to our optimistic forecast at the beginning of the year, but the direction is clear and encouraging. In terms of travelers, we served 84,000 customers compared to 113,000 in the first half of 2024. While this is fewer passengers, it is exactly in line with our strategy. Fewer seats and sales meant less last-minute discounts. That, in turn, helped us to record a load factor of 98.1%, the highest in our history. Importantly, through all of this, our customer satisfaction is up with NPS, Net Promoter Score of our customers, of 61%. This confirms the efficiency, but has not come at the expense of our service quality. A key milestone of our first half was welcoming our new strategic investor, Mr. Neset Kockar.
In April, the first stage of the agreement was completed, and Mr. Neset acquired 23.2% of our shares. The second stage, which will take his shareholding above 33%, has been currently delayed due to procedural requirements, but all parties remain committed to closing it. Mr. Kockar's arrival has already had a very real impact. He injected a EUR 1 million loan to the company, later increasing it to EUR 2 million, which definitely strengthened our liquidity. His presence also enabled us to secure a new tour operator's insurance agreement with Euroins, giving Novaturas a EUR 9 million guarantee limit in Lithuania to ensure our obligations to travelers. In June, we also renewed our EUR 3 million credit line with Luminor Bank, extending repayment until the end of the year. Together, these measures have given Novaturas a much stronger financial backbone. Beyond capital, what excites us most are the synergies. Mr.
Kockar brings decades of experience in tourism and aviation, and with his network, we're already implementing ways to broaden our hotel portfolio and travel packages. We expect travelers across the Baltics to begin seeing the benefits of this collaboration from the 2026 season onwards. In short, fewer passengers, but more higher efficiency, a leaner company, but stronger financial base, and a more challenging environment, but one that we are better prepared for. I will invite Auksė to take over from me to walk you through our financial slides. Auksė, please, the stage is yours.
Thank you very much, Kristijonas. Hello everyone, thank you very much for joining the webinar, and today I'm going to introduce you with financial figures of Novaturas Group for the first half of 2025. Firstly, let's begin with sales. As Kristijonas already mentioned, the number of sales decreased almost 90% compared to the last year, the same period. This happened due to travel program optimization impacted by the competitive environment in the tourism sector. Passenger volumes were almost 26% below last year's levels during the 2025 first half, as Novaturas continued to focus on optimizing the load factor to minimize last-minute sales, as these have usually a negative impact on the company's profitability. Therefore, as we can see, profitability per passenger was higher in 2025 compared to the same period in 2024.
Overall, competition remained intense, especially in the Turkey and Egypt regions, as these are the main winter and summer destinations and highly affect Novaturas' sales performance. Let's continue with EBITDA. EBITDA for the 2025 first half amounted to -EUR 0.3 million, as an increase of almost 84% compared to the -EUR 1.6 million in the first half of 2024. Better results were reached via optimization of the travel program, managing the oversupply in the tourism sector, and therefore, this led us to avoid a lot of last-minute sales and higher load factors. As we can see, Novaturas managed to increase the load factor from 95% in the first half of 2024 to 98% in the first half of 2025.
Gross profit for the first half of 2025 reached almost EUR 9 million, with a gross profit margin of 12% compared to the EUR 8.5 million last year, with a 9.3% margin in the same period of last year. Mentioning more precise numbers of sales profit per passenger, in the first half of 2025, the number nearly doubled, rising from EUR 28 in 2024 to EUR 55 in 2025. Okay, Kristijonas, we can move to the next slide. Talking about the total amount of selling, general, and administration expenses, we can mention that these decreased in 2025, as these were impacted by the optimization process as well. The total amount of selling, general, and administration expenses in the first half of 2025 is lower by 7% compared to the last year.
However, the percentage of selling, general, and administration expenses to the revenue remained higher in the first half of 2025 compared to the same period last year, as optimization impacted more revenue than the expenses, as part of the expenses are fixed. Talking about the structure of selling, general, and administration expenses, the structure changed a little bit, but these changes are not major. Sales salaries and related taxes decreased 40% compared to the last year. Administration sales and related taxes decreased 2% compared to the last year. However, advertising and marketing expenses decreased by 32% compared to the same period last year, as Novaturas Group continues to focus on own channel performance and position in the market. Other expenses increased by 25% compared to the same period last year. We can move to the next slide. Let's talk about market performance. Leaders of this market do not change.
The part of the revenue attributed to the Lithuanian market is 55%, where another 45% are shared by Latvia with 21% and Estonia with 24%. Lithuania market's leadership follows with the gross profit and operating profit as well, where the Lithuania market provides positive operating profit, while Latvia and Estonia have negative ones. That's all about the main financial figures. Kristijonas, please continue.
Thank you so much, Auksė. I'm moving to the next slide, and when we look at passenger volumes, the numbers clearly reflect our strategic choices. In the first half, 84,000 passengers traveled with us, about 25% less than last year's 113,000 passengers. This is not a sign of weakness, but of discipline. We continuously reduced capacity to remove pressure from the last-minute sales and protect profitability. Breaking down by market, Lithuania accounted for 24,900 travelers, Estonia for 18,700 travelers, and Latvia for 17,300 travelers. The decline was consistent across all three countries, and it is very much in line with our planning. This reduction was not easy, but it was necessary. It allowed us to balance supply with demand, maintain pricing discipline, and support the record load factor we posted. In other words, we gave up on empty seats in order to build a healthier business model.
Continuing on the passengers served, it is equally important how many passengers we serve is where they travel. Here, we see real progress. On average, the selling price has reached above EUR 780, continuing a steady climb since 2022. This shows that while volumes are lower, the revenue per customer is improving. We are also less dependent on our top destinations. As you can see, Turkey fell from 36% of our travelers in 2023 to 31% this year. Egypt declined from 20% to 1 8%, and Greece from 10% to 8%. Even though Turkey remains our largest supply market, with 26% less passengers, the load factor here actually improved by 3.2 percentage points. Meanwhile, the share of other destinations, including long-haul, grew from 37% in 2023 to 43% for this year. Our reliance on three big, highly competitive markets, which are Turkey, Greece, and Egypt, dropped from 65% to 58%.
This shift is deliberate and important. It means Novaturas is no longer dependent just on one or two countries, but it's offering a much broader and more resilient portfolio. The stars of this portfolio are the long-haul destinations. Passenger numbers to Vietnam rose by 76%, Cancun by 38%, Colombo by 29%, and Zanzibar by 28%. We also expanded from 10 long-haul destinations in 2023 to 13 in 2025, with Gambia recently joining the list. The story here is clear. This destination diversification is working. It's giving our customers more choice, it's improving yields, and making our business less vulnerable to competition in just a few markets. Of course, efficiency and diversification would mean little if customers were unhappy. However, here, the story is also positive. Our Net Promoter Score has risen sharply.
In H1 2023, it stood at 46%, and today it is 61%, comfortably above the 60% benchmark, which signals very high loyalty. By market, Lithuania scored 64, Latvia 62, and Estonia 58. Estonia is especially remarkable, moving from 19% in 2023 to 58% now. It is not just an improvement; it is a transformation. It reflects that our changes in service, product design, and communication are being felt by customers and felt positively. Now, looking at destinations, the highest- rated destinations in H1 this year were Alanya, Tenerife, Hurghada, Antalya, Kemer, and Montenegro. This shows that both traditional and newer destinations can deliver excellent customer experiences. The message is also clear. We are changing the structure of our business, but not at the cost of quality. Customers recognize and value the experience we deliver. Another encouraging trend comes from booking behavior.
We saw a 5% increase in share of bookings made more than three months in advance, and a 6% decrease in those made closer to departure. This is critical because earlier sales strengthened our cash flow, improved planning, and reduced dependence on last-minute discounts. On the operational side, punctuality on-time performance is also moving in the right direction. Our OTP was 73% this year, slightly down from 75% last year, but significantly higher than 68% in 2023. Most importantly, the number of flights delayed more than three hours, the kind of delay customers really remember, dropped from 11% in 2023 to just 5% this year. This combination, earlier booking and fewer long delays, gives customers greater confidence in us and gives us stronger control of our business. Let's go to operational efficiency, and operational discipline is now one of our strongest areas.
Our load factor reached 98.1%, up from 94.8% a year ago. This is the highest level that we have seen ever in our company, and a sign that we are no longer flying with excess capacity. By country, Lithuania improved by 3 percentage points, Latvia by 2.6 percentage points, and Estonia by 5 percentage points. The Estonian result is particularly strong and shows that optimizing strategy is working across the Baltics, not just only in our home market in Lithuania. Winter long-haul flights deserve special mention. Nearly all of them operated at 100% load factor. That is not only efficient, it also shows how strong the demand is for exotic destinations. Overall, these results demonstrate that our focus on optimizing supply is working, reducing oversupply, increasing efficiency, and supporting our path toward profitability. Okay, let's look at our sales channels, which remain stable but are evolving with customer behavior.
The B2B segment t hrough travel agencies is still the core channel, accounting for 71.9% of revenue, up slightly from last year's 70.7%. Commissions remain stable, and these relationships continue to be a foundation of our distribution. Our own retail offices contributed 18.2% of revenue, which is a small increase from 18.1% last year. It may seem modest, but it shows steady progress in direct sales. Meanwhile, the web and GDS channels made up about 10% of revenue. After the challenges in 2024 we experienced, we shifted our strategy. Today, our website, I would say, is primarily a landing page for inspiration on hotel search, while most of the actual bookings are taken and completed with the travel agent. This reflects the reality of the Baltic market.
Customers like to explore online, but we prefer to finalize purchases through personal interaction, either with our partner agencies or directly at our own sales offices. Our channel mix reflects exactly this preference. Looking at the distribution by country, the picture becomes even more clear. In Lithuania, 78.2% of sales come from partner agencies. In Latvia, this figure is 67%, and in Estonia, 60.9%. While the agency channel is strongest in Lithuania, customers in Estonia are more likely to book directly or digitally. At the same time, Novaturas is the first row in online visibility, holding a 35% share of total web traffic across the Baltics. This leadership is really valuable. Even if more bookings are made in person, most customers begin their travel or their journey online. We continue investing to keep this lead position and the first line in the racing grid, so to say.
In the first half of 2025, we improved stability and reliability of the web platform and launched new user-friendly features. Among them are AI-driven features, artificial intelligence-generated hotel descriptions, and summaries of customer reviews available publicly, which make the search process clearer and faster. We also rolled out hybrid travel packaging connected to our reservation system, which already expands hotel choice in most challenging destinations, as it is being tested in other directions. The strategy is dual: a strong and reliable agency network, which remains the core channel today, combined with digital innovation, which secures our competitiveness for tomorrow. This brings me to the end of financial, operational, and distribution review, moving to looking ahead, where we expect to serve from 170,000 to 190,000 passengers this year in 2025, generating revenues of EUR 160 million-EUR 180 million.
Based on current trends, our forecast of a few full years is an EBITDA of EUR 1.1 million-EUR 1.6 million, and the net profit between breakeven and EUR 500,000 . More important than numbers are, I would say, the priorities. Firstly, we already started selling summer 2026 earlier than usual to lock in early commitments. Also, we are enhancing operational efficiency through AI and IT integration, streamlining processes, and improving decision-making. Fifth, we are leveraging strong buying power, both in hotels and aviation, supported by our new shareholder. Finally, we're working on product differentiation, ensuring that Novaturas is not just another travel provider, but one of a distinctive portfolio that creates value for our customers. These steps make Novaturas stronger, more competitive, and sustainably profitable. This concludes our formal presentation of half-year results, and I want to thank you once again for your attention.
Now, let's continue with the Q&A session, and I will start with a couple of questions we have received a couple of days before this presentation. Both questions were about when Novaturas is planning to pay dividends to the shareholders. Thank you for the question. It is an important one for many of our shareholders. As you can see in our financial statements, Novaturas currently carries several obligations. We still have more than EUR 5 million bonds issued during the COVID period, which matures in 2027. In addition, we are using a EUR 3 million credit line from Luminor and a EUR 2.5 million credit line from SCB Bank. Earlier this year, our strategic investor, Neset Kockar, provided a EUR 2 million loan that further strengthened our liquidity. As you can understand from it, our priority must be to ensure that these obligations are properly managed and gradually repaid.
At the same time, we are working to bring Novaturas back to sustainable profitability. Once we have a stable profit base and our debt burden is meaningfully reduced, the company will then be in the position to consider dividend payments. To summarize in short, our current focus is on strengthening the balance sheet and delivering profit. Dividends still remain a goal, but only after we have first secured financial stability and fulfilled our obligations. That was the end of the answer to the two questions we have received prior to this presentation. I will ask Simona if during the presentation we received any more questions.
Yes, thank you very much for the insightful presentation. Indeed, we have received two more questions. One of them is, when can one reasonably expect Mr. Kockar to complete his acquisition of 33% shares in Novaturas? What is hampering the process?
As a company, we are not part of this process between Mr. Neset Kockar and the party which is selling the shares. The information we have been provided with is that there are more things to do before the transaction happens, some procedural things, and they are now working on it together, two parties. We were informed about this, but not about the potential date of acquisition.
Thank you for your answer. The next question is, could you please elaborate a bit more on why digital push didn't bear fruit as expected? Why do customers like to still visit partner agencies?
First of all, we have a very competitive market in the Baltics, in all three countries, in Lithuania, Latvia, and Estonia. We have two strong tour operators competing for each customer. For most of those customers, it's rather obvious to visit tour operators and also tour operators' partners, agencies, looking for different deals, getting consultations. As I mentioned, the behavior of our majority of customers in the Baltics is on the preference of contacting an agent because the purchase is not that small, and not every customer or the group, the families, which travel together, are keen to convert or to complete the purchase on the website. We were observing this trend for quite a while. The higher the competition, the higher the probability that customers are searching wider, right?
We see a very healthy traffic, which actually dropped after this new e-commerce platform, web platform, was introduced at the second half of 2023. We made some significant improvements, as I already mentioned during today's presentation. We see that the organic traffic is recovering. We focus a lot now on SEO optimization, content, also using AI tools, as I also mentioned. We see that customers are looking, browsing, selecting hotels, destinations, but not all. As I gave you numbers, 90% of our customers in Lithuania and less in Latvia and even less in Estonia are still keen to have a contact over the phone or visit the office to meet the agent for some deeper discussion and sometimes negotiation.
Thank you for your answer. One more question just arrived about dividends. When are you expecting the dividend payouts to start happening to shareholders in 2026, 2027, or further down the road?
As I already said, we have to manage the loans and the obligations, what we currently have on our table from the COVID period, also from the earlier periods. Before we manage that, we cannot talk about the dividends. Once we see, as I also mentioned, the benefits of our cooperation with the new shareholders, resources, and experience, especially in the hotel and aviation area, I truly believe that we are in a much stronger position than last year to have better results with the profit. Once we have a profit, once we manage the loans by 2027, I think then it will be the right time to look at the dividend, at the possibility of paying the dividends. It's about managing our current financial commitments and also being profitable. Once these two come together and are properly managed, we can look at our results when we earn the money.
We earn, of course, not just for the company, but for you, for the shareholders. That's when the dividends will come into picture again.
Thank you for your answer. I have just received a question about this unequal competition in the Lithuanian travel market from Latvian tour operators, especially from those who have negative capital. There are those who should declare themselves insolvent in Lithuania and have their tour operator licenses revoked. What steps and actions do you take, or do you intend to take, to prevent it and to protect the Lithuanian market and Novaturas' financial situation in the near future? Maybe some more comments, maybe this was not answered yet in full.
Okay, it's not in our direct control of making direct impact to our competitors. I think those competitors can give you maybe a better answer if asked directly. Of course, there are authorities in all three markets which oversee the performance and the business of tour operating companies. They are definitely aware and informed, and it's on their backs, you know, to react one or the other way.
Thank you very much. We addressed all questions so far, and we encourage you to take advantage of this opportunity to engage directly with the management team of Novaturas. If you haven't submitted your question yet, please don't hesitate to do so now. We still have some minutes remaining for Q&A. One more question arrived. Other costs is what?
Other costs are mainly related to increased bank charges for the loans, which were already mentioned by Kristijonas.
Thank you. There is a question here. Do you consider destination?
I'm sorry, can you repeat what destination?
P is Peru. The question is about Peru,
maybe. Yeah, Peru.
Okay. Normally, when we are working with a team before launching the season, we basically, so to say, look at the globe and look at all the possible destinations. Of course, we are trying to understand, you know, what are the ways of getting our potential customers to those destinations? Are they regular flights? Is there a charter possibility? Especially with, you know, long-haul like Peru or other destinations, having a charter for our rather boutique Baltic countries, Lithuania, Latvia, and Estonia, is not really feasible, apart maybe from some destinations, you know, like Vietnam, Thailand, and some others. Still, it's evaluated every time. Of course, we look at the seasonality. How long is the season in those countries? What is the hotel availability in each new potential destination? There is a big puzzle to put things together.
Of course, it's about our appetite for risk-taking because opening a new destination is usually an investment. Looking at our current situation based on the competitive environment in the Baltics, we are trying to be cautious about, you know, experiments and some new markets, especially long-hauls, which can be very costly in the end. As we can see in our market, you know, sometimes tour operators try to introduce either a new destination or a direct charter flight to any long-haul destination, like, for example, Vietnam. Even after, you know, introducing it, before even the season starts, it's canceled. It's a very, very precise and thoughtful thing, you know, to do to work on the new destinations, especially which are, you know, long-hauls.
To answer, we consider all the countries around the globe, but there are many, many factors to take into account and see if this is feasible to be introduced now or maybe later.
Thank you very much for your answer. Last chance to submit your question. It appears we successfully addressed all of the questions. On behalf of both Novaturas and Nasdaq Vilnius, I want to extend our gratitude to everyone who joined us today. Thank you, Kristijonas and Auksė, for sharing such comprehensive insights into Novaturas 's performance. Your expertise and transparency are truly appreciated. To our attendees, thank you for your questions and participation. It's been a pleasure having you with us today. As mentioned earlier, the full recording of today's session will be available on the Nasdaq Baltic YouTube channel shortly. We encourage you to share it with colleagues who may find the insights valuable. We look forward to connecting with you again at future investor events. Until then, have a wonderful day, and thank you once again for your time and attention.
Thank you so much, and also bye-bye from me and Auksė. Hear you soon.
Thank you, bye.