It has been a tough time for Touristik Union International (TUI), the world’s largest leisure, travel and tourism company in the world, the result of which has seen the Group’s underlying earnings fall 18% to €193 million for the previous three months up to the end of June, net profit falling 31% to €110.5 million for the same period.
Despite TUI’s turnover for the third quarter rising 5% to €5 billion and the Group remaining confident of achieving double-digit earnings growth this year, for the fourth year in a row, shares fell more than 9% to €15.96 in early trading on Thursday, August 9.
The group has been hit by a weakened pound, while it also expects to take a €35 million full-year hit from the devaluation of the Turkish lira after local loans were translated back into euros. It is estimated that flight disruption, caused predominantly by French air traffic controller strikes, cost the Group €13 million, while the recent heatwave has seen an increase in ‘staycation’ holidays, even though summer bookings were up 4%.
The Group’s Chief Executive, Fritz Joussen, commented: “We have delivered a profitable operating result already after nine months for the second year in a row. For the full year, we expect to deliver double-digit earnings growth for the fourth consecutive time.
“We have considerably reduced our seasonality and thus our susceptibility to external challenges through the Group’s transformation focusing on hotels and cruises.
“TUI is in good health, we are flexible, deliver a strong operational performance and invest in our growth segments while maintaining our cost discipline.” (€1.00 = US$1.17 at time of publication.)