TUIGrouprecorded somelossesattributable net of 139 million euros in the first quarter of its fiscal year, ended on December 31, which is 27.4% more thanRed numbersof 109.2 million euros that it faced in the same period of the previous year.
The revenues of the largest tourist group in the world, emerged from the merger betweenTUIand TUI Travel, amounted to 3,704.8 million euros in the first quarter, 4.4% more than in the same period of the previous year.
The negative operating result fell by 63.8%, to some 'red numbers' of112million euros during the first quarter. The underlying operating profit (Ebitda) recorded losses of 83.6 million euros, which means more than twice the losses of the same period of the previous year. During the first quarter, the group increased its costs by 5.8% to 3,560 million euros.
The TUI group, which counts among its investee companies with the Spanish hotelierRIU, notes that the first quarter of the year, after a record performance in 2018, was in line with its expectations with a growth in turnover and business volume (+ 1.2% of customers, 3.7 million) but with lower margins .
The company attributes the lower first-quarter earnings to an "unusually long and hot summer in northern Europe," coupled with strong demand for supplies to Turkey and North Africa that caused "excess capacity in other destinations, such as Canary Islands ", which went hand in hand with lower margins in the tourist travel business. In addition, the British pound remained weak in the face of rejection of the agreement onbrexit.
TUI already announced last Friday that it will not be able to increase its underlying earnings in 2019 compared to its initial forecasts of achieving growth of at least 10% during the next three years until 2020.
Given this situation, the group expects a negative impact due to the weakness of the pound in the sales directed to the British market that will be extended in the second half of the year (summer), and anticipates an adjusted Ebitda earnings guidance for the full year, in line with 1,177 million euros in 2018. At December 31, the group's net debt amounted to 1,832 million euros, twice less than at the end of 2018.
Consolidation in the sector
The CEO of TUI Group,Fritz Joussen, has defended during the meeting of shareholders of the group, held in Hannover, that the group is "financially strong with a solid strategic and operational positioning" in a context in which "the global trends for thetourismthey remain intact. "
In this line, Joussen has ensured that the transformation of the company started in 2014 to focus on holiday experiences (hotels, cruises and activities) has proven to be "the right approach", as these business units already represent almost 70% of the result of the group.
"During this phase of consolidation in our sector, it is particularly important to properly participate in the growth of the market, TUI has a good strategic and operational positioning, and the transformation of the group as a digital platform is progressing, we have paved the way with our investments in hotels. and ships, our digital and information technology (IT) strategy and the acquisition of the Italian digital platform Musement in 2018, "he said in the presentation of the results to shareholders.
By divisions, Hotels & Resorts obtained an underlying Ebitda positive result of 68.7 million euros, 25.2% less than a year earlier, with 3.8% less revenue, up to 139.3 million euros. euros By areas, the solid performance in destinations such as Turkey and North Africa stands out.
This result in the hotel division includes the sale of three RIU hotels in the first quarter of 2018, which contributed revenues of 38 million euros, accompanied by an increase in occupancy to 76% average and income per room (RevPar) with a average of 65 euros (vs. 63 in 2018). Since the merger between TUI and TUI Travel at the end of 2014, 57 new hotels were opened.
Reduce airline losses
In terms of airlines and touroperation, which the company groups as Markets & Airlines, it reduced by 26.5% its underlying operating losses, to some 'red numbers' of 178 million euros, with a similar turnover that amounted to 3,061 million euros, 0.8% more, with 1.2% more customers.
The group has underlined that the challenges of the sector continue, in particular, in the traditional business of operation of tour operators and airlines.
On the other hand, its Cruises division, which operates under the Tui Cruises, Marella and Hapag-Lloyd Cruise brands, registered an operating result of 47 million euros, 25.3% higher than the same period of the previous year, with revenues of 193 million euros, 0.4% more.
Hapag-Lloyd Cruises will receive two luxury expedition ships in 2019, while it will sell a third ship, which will leave the fleet in May 2021.
For its part, Destination Experiences recorded operating losses of 4.7 million euros, compared to some underlying 'red numbers' of 3.5 million euros, for a first quarter in which it multiplied by four its revenues, to 158, 3 million euros.
Holiday Experiencies recorded an underlying Ebitda of 111 million euros, down 11.8%, with a turnover level of 490.6 million euros, almost four times more.