TT. Tui Travel

TUI AG (TUI1.XE), the German holding company with assets in tourism and shipping, Monday reported that its first-quarter net loss narrowed because of reduced administrative expenses and improvements in taxes on income, noting that bookings in its key market increased notably in the past few weeks.

The Hanover-based company reiterated its outlook of slightly higher adjusted earnings before interest, tax and amortization, or Ebita, for continuing operations for fiscal 2010 and still expects stable adjusted Ebita in its tourism business.

The MDAX-listed company said its core business tourism sales and adjusted Ebita declined as expected due to the global economic crisis, whereas the stake in Hapag-Lloyd AG, measured at equity, performed better than expected.

Though Hapag-Lloyd's transport volumes dropped 13% and average freight rates 16% in the first quarter, some "substantial rate increases were achieved," TUI said.

TUI sold a majority stake in Hapag-Lloyd in March 2009. TUI and booked a EUR990 million gain in the first quarter 2009 from the EUR3.25 billion disposal, unloading EUR1.2 billion in debt. The Albert Ballin GmbH & Co. KG consortium owns a 56.7% stake in Hapag-Lloyd, while TUI owns the remaining 43.3%.

Overall, Hapag-Lloyd contributed a EUR14 million loss to the company's group result in the first quarter.

The company changed its fiscal year to bring it in line with that of TUI Travel PLC (TT.LN) and after a short financial year for 2009, the company's financial year now runs from October through September. TUI holds a 52% stake in U.K.-listed TUI Travel, which accounts for the bulk of TUI's earnings.

Its net loss for the three months ended Dec. 31 was EUR102.8 million, compared with a net loss of EUR155.1 million in the same period a year ago, clearly beating the EUR153 million net loss forecast on average in a Dow Jones Newswires poll of four analysts.

TUI's first-quarter sales dropped 15% to EUR2.95 billion, in line with a EUR2.95 billion forecast, as sales at TUI Travel, Europe's largest travel company, contracted 15% to EUR2.8 billion.

Tourism companies generally post lower results in the winter season. However TUI said that the October to December period for 2008 wasn't hit by softer demand due to booking lead times, causing a high base year.

TUI shares, which at 0805 GMT were up 3.7% at EUR6.59, have climbed about 30% in the past three months, outperforming the Dow Jones Stoxx Europe 600 travel and leisure sector, which rose only 1%. Traders pointed to a power struggle between TUI's management and major shareholder John Fredriksen as a possibility ahead of its annual general meeting Feb. 17.

Traders said the company's earnings and outlook confirmation are in line with expectations but the improvement in bookings as well as the better freight rates at Hapag-Lloyd could support the shares during the day.

-By Hilde Arends, Dow Jones Newswires; +49 69 29725 506; hilde.arends@dowjones.com

TUI Travel (LSE:TT.)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

TUI Travel (LSE:TT.)
Historical Stock Chart
Von Jul 2023 bis Jul 2024