6 days ago
Tui Group reports pre-tax earnings up by more than a third
Europe's largest travel operator has reported higher-than-expected profit and revenue despite recent heatwaves and geopolitical headwinds.
Tui, the owner of five European airlines as well as hotel chains, travel agencies and cruise lines, reported third-quarter pre-tax earnings of €321 million, up by more than a third and ahead of prior forecasts.
Revenue across the business rose 7 per cent to €6.2 billion, also ahead of expectations and driven by higher prices and 'robust' demand, with nearly 6 million holidaymakers using the firm from April to June.
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Frankfurt-listed Tui benefited from resurgent demand for travel in the years following the pandemic, but Sebastien Ebel, the chief executive, said the company's markets and airlines segment had faced a 'challenging environment … with economic difficulties in Europe, Europe-wide heatwaves in the summer and the conflict in the Middle East'.
Bookings for the summer period, typically the busiest for airlines, are down 2 per cent year-on-year alongside a 3 per cent rise in average prices. Yet early signs for winter 2025-26 bookings have been 'positive', Tui said.
The shares rose more than 8 per cent on Wednesday despite the warnings, with investors buoyed by yesterday's news of a hike to annual profit guidance. Despite concerns over slower sales in Europe, the stock has risen by more than 50 per cent over the past 12 months, a period that follows the company delisting from the London Stock Exchange in favour of Germany.
The travel giant expects annual underlying earnings before interest and taxation to increase by 9 to 11 per cent year-on-year, up from prior guidance of between 7 to 10 per cent, with revenue at the lower end of a 5 to 10 per cent range. It reported earnings of about €1.3 billion last year, alongside revenue of €23.2 billion.
Tui's cruises segment, which operates 18 ships across three brands, Mein Schiff, Hapag-Lloyd Cruises and Marella Cruises, posted a record €143 million in underlying earnings over the third quarter, up from €91 million the year before. Hotels and resorts posted €131 million in operating profit, in line with a record haul last year when adjusting for re-evaluation effects of about €15 million.
'We are benefiting from our integrated and diversified business model and managed to reduce the group's seasonality further,' Ebel said.
