TUI expects stable turnover in 2007 despite decline in 2Q
TUI AG shared an optimistic assessment of the development of its operative business in the year 2007 as a whole, even as the company witnessed a decline in turnover and Group earnings in the second quarter compared to the previous year. (8/10/2007)
Against the backdrop of currently strong bookings in the tourism division and an increase in freight rates in shipping, a significant operative improvement is expected for the second half of the year, stated the company as it shared its last set of results before merging its travel business with Britain’s First Choice to create Europe’s biggest tourism group..
Overall, underlying earnings by the Group’s divisions (tourism, shipping, central operations) totalled 18 million euros in the second quarter and thus dropped substantially year-on-year (128 million euros).
In the second quarter, underlying earnings (underlying EBITA) by tourism totalled 48 million euros, a considerable decrease year-on-year (145 million euros). This corresponded to a decline of 66.9 per cent. Underlying earnings by source market Central Europe dropped by 34.7 per cent to 47 million euros in the second quarter. The positive trend in the tour operator segment was curbed by a lower load factor of the new airline brand TUIfly.com.
TUI stated: “Underlying earnings by source market Northern Europe totalled minus ten million euros (previous year: 43 million euros) in the second quarter. This earnings trend was primarily characterised by the difficult situation in the high volume generating business and the resulting price pressure in the UK, which was augmented by drastic air passenger duties. In source market Western Europe, underlying earnings totalled minus 19 million euros, down 18.8 per cent year-on-year (-16 million euros). This was attributable to costs incurred by the increase of flight capacities in Belgium.”
During the second quarter, 6.3 million customers purchased products of the TUI Group’s tourism division, an increase of 5.6 per cent year-on-year (6.0 million). Turnover by the tourism division totalled 3.6 billion euros, matching 2006 levels (3.6 billion euros).