Tui’s sales smashed expectations, shrugging off the impact of geopolitical turbulence, and the travel group reiterated its full-year outlook.
The German-listed group posted sales of €3.7bn in the quarter ending 31 December, a 5.4 per cent growth that beat analysts’ forecasts of around €3.68bn.
Earnings before interest, tax, depreciation and amortisation improved three per cent to a loss of €101.7m, but were held back by currency headwinds. At constant currency rates, earnings were up by 7.2 per cent to -€97.3m.
Tui has reiterated its earnings guidance of at least 10 per cent growth in EBITDA over the full year.
The figures failed to wow investors, and Tui's share price fell 1.9 per cent in morning trading.
Why it’s interesting
The Russian passenger plane that was shot down in Sharm el-Sheikh in November, killing all 224 people on board, has made an impact on Tui’s results.
The travel group ceased flying to and from the Egyptian resort, that accounts for half of its presence in Egypt, and said it took “rapid action” to remix its tour operator programme.
The group said that terror attacks and “geopolitical events” weighed on its earnings this quarter.
Poor snow conditions have also taken a toll on Tui’s ski divisions.
What they said
Friedrich Joussen, chief executive, said:
We have delivered a good underlying performance in Q1 in spite of the backdrop of geopolitical turbulence in some of our destinations, with a 7.2 per cent improvement in underlying EBITA. Northern region and Riu have performed particularly well, and we remain pleased with demand and yield performance in our cruise business.
We are continuing to deliver our merger synergies as planned, with a further €10m realised in the quarter, and the disposal process for Hotelbeds remains on track.