TUI hails rebrand a success as turnover grows
TUI cut its winter losses by almost 26% to €158.6 million for the first six months of the year after increasing its turnover by 7.2% to €6.81 billion.
In the Northern region, including the UK, the first half loss was down 12.7% to €120.5 million, which the Group said was partly due to the rebranding from Thomson to TUI, which was completed during the period at an additional cost of €20 million.
The Northern region also earned an additional €15 million during the first half of the year due to the early Easter.
"We continue to deliver growth, all trends remain intact, and our very good trading performance for summer 2018 fully matches our expectations," said Group CEO Fritz Joussen.
"At growth of 26% in our operating result and 7% in turnover, TUI Group concludes the first half of financial year 2018 with a very strong set of results, and we reiterate our full-year guidance."
He said forecasts for cruising are ‘excellent’ and confirmed additional ships will be delivered to TUI’s cruise subsidiaries in 2018, 2019 and 2023. The Board has also today agreed to construct a third expedition ship for Hapag-Lloyd Cruises.
The Group also plans to continue to expand its hotel companies: RIU, Robinson, TUI Magic Life and TUI Blue, which currently have 380 properties in total.
Fiona Cincotta, senior market analyst at City Index, said: "TUI’s focus on growing its cruise part of the business appears to be paying off with strong demand evidenced by the need for a new cruise ship, already approved for construction and by solid summer trading quarter numbers; a quarter which is traditionally weak.
"We are still talking about an operating loss but the group remains on target for an annual 10% rise in earnings, a significant achievement given the challenging environment that TUI faces across Europe as consumers are stretched and consumer spending low.
"Under tough financial conditions larger purchases, such as a holiday are often one of the first costs to go. However, with UK inflation easing and wages on the up, TUI looks well positioned to capitalise on stronger consumer spending as and when it happens.
"In reflection of the firm’s strength, its share price closed the previous session trading at an all-time high."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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