Tui Group says trading this summer is in line with expectations despite revenue tumbling due in part to impact of terror attacks in Europe
FTSE 100-listed Tui Group reported a five per cent decline in revenue for the third quarter of 2015/2016, as its western region operations felt the impact of the terror attacks which took place in Brussels earlier this year.
Turnover at the German company was €4.6bn (£4bn) in the three months to 30 June, down from €4.9bn in the same period of last year.
Earnings before interest, income taxes, depreciation and impairment went up 4.7 per cent to €243m from €232m.
Gross profit dipped by 4.8 per cent to €429m, from €451m.
Shares in the company were up 4.15 per cent in early trading.
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Why it's interesting
Tui Group said it was upbeat about its performance for the rest of the year – despite acknowledging the impact of various terror attacks in Europe over the past year.
In its central region – comprising Germany, Austria, Switzerland and Poland – the seasonal loss for the nine months to the end of June widened by €8.6m to €106.5m, which the company said was driven by geopolitical events in Egypt and Turkey.
Meanwhile, in its western region, which is made up of tour operators and airlines in Belgium and the Netherlands and France, the seasonal loss widened by €11.1m, to €82.2m. The company said this was partly due to lower demand due to the terror attacks in Brussels in March.
However, the company said it is well positioned to grow full year earnings by around 10 per cent.
What Tui Group said
"We have delivered a good performance this quarter, driven by the strength of our vertically -integrated model and the delivery of our growth plans and merger synergies," said Tui chief exec Friedrich Joussen.
"Summer 2016 trading remains in line with our expectations, with 87 per cent of the source markets' programme sold to date and sustained strong demand for holidays in the western Mediterranean, long haul destinations and cruise.
"Given the resilience of demand for our holidays, hotels and cruises, the flexibility inherent in our business model, our balanced portfolio of businesses and destinations, and the strength of our balance sheet, we are well positioned to deal with the changing geopolitical and macroeconomic environment."
Tui Group is proving its resilience with an optimistic view of the rest of the year, despite incurring losses from terror attacks in the first three quarters.