TUI AG to off-load container shipping to focus on travel
TUI AG is to expand its tourism businesses and off-load its container shipping interests.
The decision came at a meeting of the German-based organisation’s supervisory board in advance of annual financial results being released today (Tuesday).
A statement said that the board had “decided to prepare a separation of container shipping from the Group. All options including a spin-off, merger or divestment as a single entity are going to be examined.
“At the same time, the executive board has been given the mandate to identify further growth options for the expansion of the tourism business.â€
Announcing its 2007 financial results today, TUI said turnover by the tourism division grew by 11 per cent to €15.6 billion, while earnings rose by almost 14 per cent year-on-year to €449 million.
It said growth was driven both by TUI Travel and TUI Hotels & Resorts.
Due to the consolidation of First Choice’s turnover since September 2007, TUI Travel’s turnover grew by 11.6 per cent to €15.3 billion, including around €1.3 billion for the former First Choice activities.
Earnings rose by 17.7 per cent year-on-year to underlying EBITA of €304.4 million, including around €3 million by the former First Choice sectors.
For the whole TUI Group, including its shipping business, 2007 turnover rose by around 7 per cent to €21.9 billion, while profits jumped 47 per cent, fuelling a rise in operating earnings (underlying EBITA) by the continuing operations to €616 million.
For 2008, TUI expects an increase in Group turnover of around €4 billion to €26 billion due to higher turnover expectations for both the tourism and shipping divisions.
The tourism division expects to increase its turnover to around €19 billion, primarily thanks to the consolidation of the First Choice activities for a full year.
It also expects the First Choice merger to increase earnings, thanks to initial synergy effects, margin improvements in the mainstream business and growth of the specialist holidays, activity holidays and online destinations services sectors.
TUI said booking volumes remain strong, both for the current winter season and the 2008 summer season.
by Phil Davies
Phil Davies
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