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National Express posts loss as passengers stay at home

By Yadarisa Shabong

(Reuters) – Bus company National Express reported a pre-tax loss of 61 million pounds ($79.69 million) for the first half on Thursday and pledged further action to strengthen the balance sheet as travel remains at “much suppressed levels”.

Shares in the British company, which operates urban and long haul buses and more than 20,000 school buses in North America, fell 12% in early trade.

So far this year, the stock has lost around two thirds of its value, Refinitiv Eikon data shows, as all transport providers have been hit by school closures and home-working because of the pandemic.

“While there are some signs of demand returning, levels are both significantly reduced and subject to variability given local lockdowns, the impact of quarantines and uncertainty over the extent of U.S. school re-openings,” outgoing CEO Dean Finch said in a statement.

The statement said National Express would continue with action “to strengthen the balance sheet, improve liquidity, cut capital and operational costs.”

The company’s half-year revenue, bolstered by British government aid programmes since March, fell 23%.

It said its crisis planning showed it would be able to meet debt tests over the next year, necessary to satisfy its creditors.

Last month, rival FirstGroup said its survival was in question after a collapse in passenger numbers led to a 153 million pound loss for the year.

Analysts at Liberum said they believe public transport usage will revert to normal on a 12-to-24 month view. “However, the prospects of a quick and sharp recovery are fading,” they said.

At the height of lockdowns in May, National Express raised equity of about 230 million pounds and has received British government aid until October.

Its underlying pre-tax loss of 60.7 million pounds for the six months to June 30 compares with a 114.6 million pounds profit a year earlier.

($1 = 0.7655 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich and Barbara Lewis)

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