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TUI AG sees improved summer travel profits
TUI Group achieved “substantial increases†in turnover and operating profits in its core tourism businesses in the third quarter of the year.
Turnover grew by around 17% from 5.8 billion euros to 6.8 billion euros, mainly due to the consolidation of First Choice.
Operating profits climbed by around 15% to 795 million euros from 689 million euros in the same period last year.
But overall group profits were down by around three per cent year-on-year to around 448 million euros due to on-going restructuring and one-off effects on the tourism division and a drop in container shipping profits.
“Although the consequences of the current financial crisis and the resulting possibility of a slowing world economy cannot yet be fully assessed, TUI AG remains confident that a significant increase in operating earnings will be achieved for the overall year 2008,†the German group said.
Turnover by subsidiary TUI Travel grew by around 17% to 6.6 billion euros from 5.7 billion euros.
The underlying EBITA was up by around 19% to 689 million euros from 581 million euros.
Operating earnings improved overall, but were impacted by the strong year-on-year decline of the British pound sterling exchange rate, TUI AG said.
TUI Travel – the parent of Thomson and First Choice plus tour operations across Europe and Canada – said the TUI AG consolidation accounting policies and formats in euros were not “directly comparable†with its financial information for the year ending September 30, details of which will be released on November 27.
However, TUI AG said the Northern Europe division (UK, Ireland, Canada, Nordic countries, First Choice Airways, Thomsonfly, TUIfly Nordic), achieved stronger pricing due to capacity cuts and the resulting reduction in the level of discounting in the form of last minute offerings.
“Tourism is expected to post a significant increase in its operating earnings level based on its performance in the first nine months,†TUI AG said
“TUI Travel has completed the 2008 summer season with good results. Booked turnover in the mainstream business was two per cent up year-on-year.
“Customer volumes decreased by six per cent, on capacity reduced by eight per cent.
*See linked TUI Travel trading update story.
by Phil Davies
Phil Davies
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