Travelport expects to achieve $150m of annual run rate Worldspan synergies

Travelport Limited garnered net revenue worth $761 million and EBITDA of $165 million as the parent company of the Travelport group of companies shared its financial results for the quarter ended September 30, 2007.

Adjusted net revenue was $695 million and adjusted EBITDA was $186 million, representing growth of 6% and 28%, respectively, over the same period last year.

The reported results include Worldspan results for the 41 days it owned the company during the quarter. However, Travelport excluded the Worldspan results from its adjusted results to facilitate prior year comparisons.

Travelport CEO and President, Jeff Clarke, stated said the company had a strong quarter, leveraging its  revenue growth in each business and its new cost structure, to deliver a 28% improvement in adjusted EBITDA.

"Since Blackstone and TCV's acquisition of Travelport in August 2006, the company has done a tremendous job re-engineering its cost structure and delivering strong operating performance, which is reflected in our financial results. Our Galileo GDS business grew segments 3% on a worldwide basis with strong growth in the Asia Pacific region and our GTA business had accelerating Total Transaction Value (TTV) growth of 25% during the quarter."

"On August 21st, 2007, we completed the acquisition of Worldspan. Although Worldspan has experienced a difficult year, we are confident about the business, including the customer base, industry leading technology and the potential synergies, which we now expect to yield $150 million of annualised savings from our previous estimate of $100 million," he said.

Mike Rescoe, Travelport Executive Vice President and CFO, said, "Travelport's results in the quarter reflect the strong productivity gains achieved across our businesses. During the quarter, we realised $40 million of cost savings, which helped drive over a 450 bps increase in Adjusted EBITDA margins. As of the end of September, we have completed actions, which we expect to yield approximately $171 million of annualised cost savings from our original re-engineering programm3. In the 75 days since the acquisition of Worldspan we've begun executing our integration plan and are off to a strong start. As a result, today we are increasing our estimate of the annual synergies from the transaction to $150 million."

Net revenue and EBITDA in Galileo business were $381 million and $117 million, respectively, while net revenue and EBITDA for GTA were $110 million and $38 million, respectively, during the third quarter of 2007.

Higher revenue resulted from growth in GDS transactions, primarily in the US and Asia Pacific regions.

"Global transaction growth as well as our opt-in programme in the US more than offset the anticipated yield decline from our new US airline contracts. In addition, Galileo realised $15 million of savings from our re-engineering efforts and operating expenses, excluding inducements to agents," stated the company.

The company shared that it will no longer consolidate the results of Orbitz Worldwide into its financial statements but will account for their results under the equity method of accounting going forward.