In news from TUI Group, the company reports good financials for the start of 2017, with narrowing loss from 2016. According to TUI, underlying EBITA rose by 17 per cent to a loss of €66.7 million in the period from October to December 2016, which was an improvement over the previous year.
The TUI report shows the group’s turnover climbed by 8.5 per cent to €3.49 billion, up from the previous year figure of €3.21 billion. Fritz Joussen, CEO TUI Group, had this to say about the Group’s strength despite a challenging market environment in some destinations:
“A broad portfolio of Group-owned hotel and cruise companies, aircraft and tour operators are gathered under the Group umbrella. Moreover, we operate in more than 100 countries around the globe. This gives us great flexibility and enables us to quickly remix our programme if our customers’ travel preferences change. The transformation of our business as an integrated tourism business based on own hotel and cruise brands, initiated in 2014, is really paying off.”
Joussen went on to say TUI is in excellent health overall, accross several regions and including a few mergers and acquisitions. Some key points made in the company’s press release were:
- Q1 2016/17: underlying EBITA up 17.0 per cent1
- Q1 turnover climbs by 8.5 per cent1
- Growth driven by Northern Region, RIU and Cruises
- Further post-merger synergies worth 5 million euros delivered
- Full-year earnings growth guidance reiterated – underlying EBITA to grow by at least 10 per cent1
- CEO Joussen: “Transformation of our Group makes TUI resilient and more competitive. Customers benefit from the variety of countries within the TUI-programme.“
- Sales process for Travelopia initiated in Q1 2016/17 now successfully completed
TUI Group also announced an agreement to sell Travelopia to private equity firm KKR for £325 million.
Finally, the best point Joussen made deals with the scope and massive market TUI operates in. 100 countries worldwide help TUI to provide offerings to customers few other operators can, should their travel preferences shift. Just how TUI will eventually justify ongoing losses overall though, remains to be seen. Calling tens and hundreds of millions of euros in red ink “positive” can only prop up investor confidence so long.