Wellington, March 16 NZPA - Travel and tourism services company Southern Travel Holdings reported a $538,000 half year loss as it confronted the global financial crisis, impacts of swine flu, and foreign exchange movements.

The result for the six months to the end of December compared with a net surplus of $503,000 a year earlier, and was achieved on revenue down 27.5 percent to $9.98 million.

Chairman Rodney Walshe said that without the loss on foreign exchange movements and the impact of swine flu cancellations, particularly on the company's Japan student business, break even ebitda (earnings before interest, tax, depreciation and amortisation) would have been achieved in the first half.

Foreign exchange fluctuations were a fact of life in New Zealand tourism and must not be used as the excuse for a poor profit performance, he said.

A strong tourism business could consistently produce a sound return despite adverse exchange rates, particularly a business such as Southern Travel which was involved in both inbound and outbound tourism.

So break even ebitda was not satisfactory and demonstrated that despite significant restructuring during the past three years, issues in the business still needed to be addressed, Mr Walshe said.

Progress was being made, but because of continuing difficulties in the company's inbound markets and the need to complete a strategic review of the challenged Japan operation, it would be 2011 before an acceptable improvement in results could be predicted.