TUI AG Posts Q3 and Nine-Month Loss

TUI AG has reported a loss of 40 million euro on revenues of 4.4 billion for its third fiscal quarter ended June 30, 2011, compared to a loss of 12 million euro on revenues of 4.0 billion euro for the same period last year.

For the nine-month period, TUI reported a loss of 343.2 million euro on revenues of 10.8 billion euro this year, compared to a loss of 444 million euro on revenues of 9.9 billion euro last year.

According to TUI, there was increased demand for travel in Q3 and all three of its operating sectors (tour operators, hotels and cruises) delivered year-on-year increases in sales volumes driving up revenues.

The company stated that operating earnings reflected two opposing trends. Earnings benefited from higher customer volumes and better average prices. On the other hand, they were impacted more strongly than expected by the unrest in North Africa, above all in source market France and the hotel business in Egypt.

Revenues by the Cruise Sector amounted to around 49 million euro in Q3, up almost 55 percent year-over-year, from 32 million euro, excluding the joint venture with Royal Caribbean, which is reported in the consolidated financial statement, TUI stated.

The company also said the increase reported was distorted since the prior-year included unscheduled dry-dock periods of a cruise ship.

In the first nine months, the cruises sector delivered revenue growth of around 10 percent year-on-year to 145 million euro, up from 132 million euro.

For Q3, operating earnings (underlying EBITA) totaled 0.2 million euro, compared to 2.2 million euro last year and for the nine-month period a loss of 3 million euro this year vs. a loss of 2 million euro last year.

These results reflect the start-up cost for the fleet expansion in Hapag-Lloyd Kreuzfahrten and the cost required for Mein Schiff 2, operated by TUI Cruises, to enter service.

Hapag-Lloyd Kreuzfahrten increased the load factor on its vessels from 54.7 percent to 75.7 percent and the average rate from 367 euro to 390 euro per passenger per day in Q3.

TUI Cruises improved the load factor on its fleet from 92.7 percent to 97 percent and the average rate from 166 euro to 167 euro per passenger per day.

TUI Travel grew revenues by about 9 per cent to 4.2 billion euro in Q3 this year from 3.9 billion euro last year. This growth was mainly driven by stronger demand in what it called mainstream business. Despite the rise in volumes, operating earnings (underlying EBITA) decreased slightly year-over-year to 87 million euro from 88 million euro. The Northern Europe region posted a positive performance. TUI UK tour operators grew against the market trend in the third quarter. TUI Travel also benefited from the Easter business, which fell in the period under review.

Business in France, by contrast, showed a negative development, as it was affected more strongly than expected by the impact of the unrest in North Africa. The considerable drop in demand for holidays in Tunisia and Morocco was not offset by alternative offerings. In the light of the difficult market situation in France, TUI Travel is therefore planning to restructure the French tour operator organization. In future, the Nouvelles Frontières and Marmara brands are to be managed as a single business entity. For the first nine months, TUI Travel posted accumulated revenue growth of almost 10 percent to 10.3 billion euro. Operating earnings improved by around 3 percent to a seasonal loss of around 298 million euro.

TUI Hotels and Resorts sector grew revenues by about 3 percent to 185 million euro. Bed occupancy increased from 72.7 to 76 percent on slightly higher capacity and good demand. Average revenues per bed totaled 45.37 euro, up from 44.77 euro. Operating earnings by the sector declined by 10 million euro year-over-year to 17 million euro from 27 million euro last year. This development reflects lower occupancy and rates in TUI hotels in Egypt driven by events in North Africa as well as foreign exchange effects. For the first nine months of the financial year, TUI Hotels & Resorts recorded accumulated revenues of almost 535 million euro, down from 550 million euro last year. Operating earnings totaled 54 million euro, down from 63 million euro.

The Container Shipping section dropped by nearly 9 percent to 1.5 billion euro, from 1.6 billion euro the year before. This development was mainly attributed to the 11 percent weakening of the US dollar against the euro, while transport volumes rose slightly and freight rate levels remained almost stable.


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