2nd UPDATE: TUI Trims 1Q Loss On Costs, Taxes; Bookings Up
15 Februar 2010 - 11:37AM
Dow Jones News
TUI AG (TUI1.XE), the German holding company with assets in
tourism and shipping, Monday reported a narrowed first-quarter net
loss thanks to improved administrative expenses, financial result
and taxes on income, adding 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. It also still
expects stable adjusted Ebita in its tourism business, while it
predicts its container-shipping unit Hapag-Lloyd AG to contribute
negatively to the group result.
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, measured at equity,
performed better than expected.
The market welcomed the news and at 1000 GMT, TUI shares were up
7.2% at EUR6.81. Brokerage Landesbank Baden-Wuerttemberg said the
narrowed net loss is a positive surprise with the main reason for
the positive deviation being the Hapag-Lloyd result. It noted sales
and adjusted Ebita "were slightly shy of our and consensus
estimates." It kept its hold rating and still has the target price
under review.
Martina Noss of NordLB said the only surprise in the earnings
was the good financial result, but pointed out this is mainly due
to an appreciation from a loan for its container shipping
operations. She maintained the hold rating with EUR7 target
price.
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%.
Recovery tendencies in the container shipping business are
expected to improve the result situation, however, the earnings
situation remains negative. 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 from a net loss of EUR155.1 million a year earlier. Sales
dropped 15% to EUR2.95 billion, 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 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.
Company Web site: www.tui-group.com
-By Hilde Arends, Dow Jones Newswires; +49 69 29725 506;
hilde.arends@dowjones.com
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