Spain's eDreams books first net profit since pandemic

By Matteo Allievi and Jakub Olesiuk

(Reuters) -Spanish online travel booking company eDreams ODIGEO on Thursday posted its first net profit since the pandemic ravaged the travel industry in 2020 as it won more customers over to its subscription model.

The Barcelona-based firm made a net profit of 4.1 million euros ($4.5 million) in April-June, its fiscal first quarter, compared with a loss of 13.9 million euros one year ago.

A significant share of eDreams' profit came from subscriptions - it charges an annual flat fee of about 55 euros for access to lower fares when booking on its websites - as it gained customers.

The company said subscriptions represented 57% of its cash revenue margin in the quarter as it reached 4.7 million subscribers in the period, 47% more than a year earlier.

Since many of its subscribers are now renewals, the average marketing cost of gaining subscribers is falling, boosting profitability further, Chief Financial Officer David Elizaga told Reuters.

While subscriptions are common in other industries, such as music, television and telecoms, eDreams is a pioneer in developing the model for the travel industry.

"With a base of subscribers who have already paid their subscription fees, the company is less subject to the vagaries of demand," said Juan Pena, an analyst with brokerage GVC Gaesco.

eDreams shares were up 4.1% in early afternoon trading.

Demand for holidays, despite soaring living costs, also contributed to the strong quarter, Chief Executive Dana Dunne said.

"Despite trading down for other discretionary expenses, consumers did not renounce leisure travel. However, they reduced the duration of their stays and travelled to closer destinations," Dunne said in an interview.

eDreams said it was on track to meet or exceed its target for 7.25 million subscribers and 180 million euros in cash earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2025.

($1 = 0.9160 euros)

(Reporting by Matteo Allievi and Jakub OlesiukEditing by Sharon Singleton and Mark Potter)