TUI Group continued its positive performance in the first half of financial year 2015/16 with a year-on-year increase in its result.
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In the period under review, the underlying operating result (EBITA) showed a typical seasonal loss of 236.9 million euros, down 16.3 percent year-on-year. On a constant currency basis and excluding the benefit from the earlier timing of Easter, the typical seasonal loss was reduced by 13.5 percent to -245.0 million euros.
Turnover by TUI Group grew by 2.7 percent to 6.79 billion euros within the same period (previous year 6.61 billion euros).
Following the first successful step through of the sale of Hotelbeds Group in the first half of 2015/16, the Group intends to dispose the Specialist Group.
The segment bundles the activities of specialist travel companies and had been managed as an independent unit by Will Waggott since the merger of TUI AG and TUI Travel PLC at the end of 2014.
The disposal of the Specialist Group portfolio is intended to happen in one transaction with the exception of two brands. Crystal Ski and Thomson Lakes & Mountains will not be sold and instead they will be transferred to the business in the UK and Ireland with immediate effect.
Both Crystal Ski and Thomson Lakes & Mountains have strong synergies and vertical integration with the core Tourism business.
The Group’s Tourism segment comprises all Source Markets, the enlarged Hotels & Resorts operations and Cruises. Source Markets recorded a seasonal loss of -296.4 million euros (previous year -264.2 million euros).
At -110.9 million euros, the result posted by Northern Region (UK & Ireland, Nordics, Canada, Russia) was almost flat year-on-year (-109.6 million euros). UK & Ireland reported a strong result, in particular for the Canaries, long-haul bookings and cruises.
Trading in Canada, by contrast, was impacted by foreign exchange effects from the movement of the Canadian versus US dollar.
On the other hand, Central Region (Germany, Austria, Switzerland, Poland) reported a decline in its result to -109.8 million euros versus the prior year (-93.7 million euros), as expected. This was above all driven by Source Market Germany, which remained impacted by very challenging trading conditions and lower demand for destinations in North Africa and Turkey.
Western Region (Belgium, Netherlands, France) reported an operating result of -75.7 million euros. However, the prior year reference result (-60.9 million euros) included a significant non-recurring credit in Source Market Belgium.
Excluding this, Western Region’s seasonal operating loss was slightly down year-on-year. While France delivered an improved result, Belgium was impacted by the decline in demand for North Africa and by the closure of Brussels Airport.
France, in particular, reports a positive trading performance, with Summer trading currently ahead of prior year.
TUI has agreed to acquire Transat tourism group’s French tour operating business in the framework of its turnaround plans for France in order to strengthen its market position.
Due to the acquisition, TUI France is not only expected to achieve sound profitability but also to become the market leader in France.
The combination of wider product choice and higher flexibility will also enhance the customer experience.
In the first half of 2015/16, Hotels & Resorts again posted a very good result with underlying EBITA of 83.7 million euros (previous year 55.6 million euros).
Riu, in particular, achieved a four percentage point improvement in occupancy and an increase in average rate per bed of eight percent, whilst increasing capacity by two percentage points.
Riu reported substantial growth in bookings, in particular to the Canaries and the Caribbean. Robinson saw its result impacted by various factors including additional marketing costs and the currently weaker demand for clubs in Turkey.
In the period under review, TUI Group achieved a considerable improvement in the positive operating result in Cruises. Underlying EBITA amounted to 40.1 million euros (previous year 18.3 million euros).
TUI Cruises achieved an improvement in its operating result, benefiting in particular from strong trading by Mein Schiff 4, which had joined the fleet in June 2015, and the high load factor of its vessels as well as strong yield management.
At 101 percent, the load factor of TUI Cruises’ fleet, which currently comprises four cruise ships, remained flat on the very high level reported last year, while the average rate per passenger per day also matched the prior year’s level at 147 euros.
TUI Cruises will continue its growth path in the premium cruise market segment in the current financial year. Mein Schiff 5 will be named and launched in July.
Cruise ships Mein Schiff 6 to Mein Schiff 8 will be commissioned in the period from 2017 to 2019. It is also intended that, with the delivery of Mein Schiff 7 and Mein Schiff 8, Mein Schiff 1 and Mein Schiff 2 will be redeployed to Thomson Cruise, leaving TUI Cruises with a six ship fleet.
The load factor of the luxury and expedition ships of Hapag-Lloyd Cruises rose to 75 percent versus the prior year (74 percent). The average rate per passenger per day was 561 euros in the period under review, up by seven percent year-on-year. ■