Redcap Tour Reports 7.64 Billion KRW Operating Profit in 3Q, Up 74.4% YoY
[Asia Economy Reporter Park Soyeon] Redcap Tour's travel business achieved operating profit in the third quarter, marking a successful turnaround after 10 quarters since the COVID-19 pandemic. While related industries such as airlines and hotels forecast a return to profitability as early as the end of this year or early next year, this is a welcome achievement ahead of the initially targeted timeline.
On the 27th, Redcap Tour announced its preliminary third-quarter operating results, reporting consolidated sales of 64.59 billion KRW and operating profit of 7.64 billion KRW, increases of 22.4% and 74.4% respectively compared to the same period last year. Ordinary profit and net profit were 5.1 billion KRW and 3.98 billion KRW, up 72.7% and 68.8% respectively.
Travel business sales reached 7.22 billion KRW, a 191.9% increase year-on-year, and operating profit turned positive at 380 million KRW. By expanding the base from B2B (business-to-business) to B2G (business-to-government), it improved performance faster than any other company in the industry.
With the easing of social distancing and the expansion of countries allowing quarantine-free entry, demand for corporate business trips and group events showed a sharp recovery, and the number of outbound travelers tripled compared to the same period last year.
The rental car business posted sales of 57.38 billion KRW and operating profit of 7.25 billion KRW, increases of 14.0% and 15.4% year-on-year respectively. Despite variables such as new car delivery shortages and high inflation and exchange rates caused by US interest rate hikes, solid performance continued.
Long-term rental contracts increased, leading to a 19% rise in rental sales compared to the same period last year, while used car sales revenue decreased by 2% due to fewer cars sold as contract expirations were extended. Vehicles were secured based on analysis data of estimate inquiries and purchasing customers to proactively meet customer demand, and rental contracts were increased by diversifying sales channels such as E·LG Life Care.
Redcap Tour CEO Ahn Yoosung said, "With the increase in corporate overseas business trip demand and international flight operation rates, the travel business has entered a full-scale normalization track," adding, "If China implements entry easing measures following Japan, Taiwan, and Hong Kong, we expect the pace of performance improvement to accelerate even further."
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