FRANKFURT--TUI AG (TUI1.XE ) Wednesday signaled a return to form
for the European travel industry. The German company, one of
Europe's biggest tourism groups, swung back into the black and
forecast better earnings this year on improved sales and cost cuts
as it said it would restore its dividend after a six-year
hiatus.
TUI reported net profit of 4.3 million euros ($5.91 million) in
the 12 months to Sept. 30, compared with a loss of EUR15.1 million
in the year-earlier period, on a 0.8% increase in revenue to
EUR18.48 billion. TUI has proposed a dividend of EUR0.15 a
share.
Earnings before interest, taxes and amortization rose 10% to
EUR594.8 million due largely to a strong performance from its
54.48%-owned U.K.-based tour operator and hotel-booking unit TUI
Travel PLC.
TUI's turnaround follows a number of torrid years in which the
financial crisis, travel disruptions, and political unrest in
popular destinations for European tourists such as Greece, Egypt
and Tunisia, hit the travel sector in Europe hard.
The past year has proved less disruptive, however, apart from a
resurgence of political unrest in Egypt in late summer, with
relatively buoyant U.K., German and Nordic economies helping to
lift revenues at TUI's tour-operating, resort and cruise units.
TUI has also clamped down on costs since May, with
administrative expenses held flat in the year, though it booked a
EUR62.3 million charge for restructuring.
TUI expects a 16% to 23% rise in Ebita in the current year,
before restructuring and other one-off costs, on a rise in revenue
of 2% to 4%.
"Our good operating results and virtually debt-free balance
sheet enable us to pay a dividend to our shareholders earlier than
promised," Chief Executive Friedrich Joussen said.
TUI, which had previously said there would be no dividend until
2015, expects to generate cash of around EUR100 million this
year.
"The proposed dividend of EUR0.15 per share is a positive
surprise," said Jochen Rothenbacher, an analyst at Equinet.
TUI is yet to disentangle itself from unprofitable shipping
operator Hapag-Lloyd in which it retains a 22% stake.
Hapag said earlier this month it is in talks about a merger or
alliance with Chilean rival Compania Sud Americana de Vapores S.A.
(VAPORES.SN). TUI is considering floating its Hapag stake on the
stock market.
Write to Nicky Redl at Nicky.Redl@wsj.com
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