Australia-based travel agent Flight Centre announced a first half net profit drop of 36 percent, due to “unprecedented airfare discounting.”

The group’s net profit for the six months to December 2016 was AUD$74.4 millionn (USD$57.2 million), down from AUD$116.7 million in the previous year period. Profit before tax was AUD$109.2 million, from AUD$156.8 million previously.

Revenue eased down to AUD$1.251 billion, from AUD$1.258 billion on “airfare deflation”, the company said.

Flight Centre’s major market, Australia, saw growth in total transaction value (TTV) of 5 percent to AUD$5.1 billion as the company recorded strong growth in international and domestic flight sales.

The USA and Mexico segment showed a 6 percent lift in TTV to AUD$1.3 billion, but losses increased in a low fare environment and the seasonally softer trading period, the company said.

Profit in the UK rose 10 percent in the second quarter to December 31 after a flat first quarter.

Looking forward, the group said trading conditions globally remain uncertain and the external factors that impacted the first half results - currency movements and airfare deflation - may continue throughout the second half. Guidance on underlying profit before tax was revised down to between AUD$300 million and AUD$330 million.