2nd UPDATE: TUI AG Expects Good Year, But Dividend Still On Hold
14 Dezember 2010 - 10:01AM
Dow Jones News
TUI AG (TUI1.XE), a holding company with assets in tourism and
shipping, Tuesday said it expects to report a positive group result
for its current fiscal year due to strong earnings from TUI Travel
PLC (TT.LN) and continued cost control, but said it won't pay a
dividend for fiscal 2010.
When and to what extent the MDAX-listed company will restart
dividend payments depends on the further development of the
company, it said.
Chief Executive Michael Frenzel said the Hanover, Germany-based
company is well positioned for the coming financial year. It
reported that the winter travel season is developing well, with
bookings above last year's level in Europe and substantial growth
in some markets.
TUI AG is the majority owner of Europe's biggest travel company,
U.K.-based TUI Travel. The British company is expected to show a
slight increase in earnings before interest, taxes and
amortization, or Ebita, excluding gains on disposals and
restructuring expenses in fiscal 2011. Adjusted Ebita for
continuing operations, which includes the tourism business and
central operations, is expected to rise on the year.
TUI AG expects cash inflows in the current fiscal year, which
began Oct. 1. It said it will book EUR325 million in inflows from
the sale of the administrative building of container shipping
business Hapag-Lloyd to that company, as well as income from other
real estate divestments and sale and lease back deals. Most of the
total inflow will be booked this year.
The company also expects some cash inflow from repayments of
remunerations paid to board members after a restatement of its 2009
shortened financial year earnings. The company was forced to
restate its 2009 earnings after TUI Travel discovered an accounting
error.
TUI also wants to further cut its net debt level, which reduced
to EUR2.29 billion in fiscal 2010 from EUR2.33 billion a year
earlier.
Net profit for fiscal 2010 fell 40% to EUR101.8 million, after
the previous year was boosted by the disposal of a majority stake
in its container shipping unit Hapag-Lloyd. This year's figure
clearly beat the EUR80 million expected, according to a Dow Jones
Newswires poll of nine analysts.
Earnings from TUI Travel were hit by air-traffic disruptions
caused by an ash cloud from a volcanic eruption on Iceland earlier
this year.
TUI AG's sales contracted 1.5% to EUR16.35 billion but still
beat analysts' forecast of EUR15.9 billion. Sales at TUI Travel,
which accounts for the bulk of TUI's earnings, fell to EUR15.7
billion from EUR15.9 billion a year before.
TUI aims to fully divest its stake in Hapag-Lloyd. After a
planned capital increase, TUI will hold 49.8% in the company and
the Albert Ballin GmbH & Co. KG consortium will hold the
remaining 50.2%. It is considering a stock listing of the unit or a
sale to strategic or financial investors.
TUI AG changed its fiscal year to bring it in line with that of
TUI Travel and, after a short financial year for 2009, the
company's financial year now runs from October to September.
-By Hilde Messer and Kirsten Bienk, Dow Jones Newswires; +49 69
29725 506; hilde.messer@dowjones.com
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