TUI Shares Rise on Forecast of Travel Growth

TUI AG, the German owner of Europe’s largest travel company, rose in Frankfurt trading after saying it expects “moderate growth” next year even as the European economy remains difficult.

Pretax profit in the year through September advanced to 206.8 million euros ($269 million) from 177.8 million euros a year earlier, the Hanover-based company said today in a statement. TUI said it expects moderate growth in revenue and operating earnings in fiscal 2012.

“The environment will remain challenging in the light of weaker economic growth in Europe and persistently high energy costs,” Chief Executive Officer Michael Frenzel said. “Nevertheless, we are entering the new year stronger and will consistently continue to pursue our successful strategy of differentiated products.”

TUI’s message and share advance contrasted with competitor Thomas Cook Group Plc (TCG), which reported an annual net loss of 521 million pounds ($807 million) today and said it will close about 200 shops in the U.K. and scale back its plane fleet.

TUI shares gained as much as 5.4 percent and were up 3.6 percent at 4.03 euros as of 9:51 a.m. in Frankfurt. Thomas Cook shares were down 2.8 percent in London, extending the decline this year to 92 percent, compared with TUI’s 62 percent drop.

TUI said full-year sales gained 6.9 percent to 17.5 billion euros, beating the average analyst estimate of 16.9 billion euros. The company said operating earnings rose to 600 million euros from 589 million euros a year earlier.

‘Satisfying’

The company delivered “solid full-year figures and a satisfying outlook,” Raimon Kaufeld and Hartmut Moers, analysts at WestLB AG, wrote in a report. The analysts maintained their “buy” recommendation on the stock.

TUI Travel Plc, which accounts for more than 95 percent of TUI’s revenue, said this month that underlying operating profit advanced 18 percent to 471 million pounds in the year through September, beating a 467 million-pound average estimate.

TUI owns a stake in Hapag-Lloyd AG, Germany’s largest container-shipping line, which said last month that third- quarter profit slumped 96 percent to 9.6 million euros because of overcapacity in the industry.

TUI said yesterday that its executive board resolved to sell most of its stake in Hapag-Lloyd to majority owner Albert Ballin. TUI said today that container-shipping operations hurt fiscal-year earnings by 2 million euros because of higher fuel costs and currency effects.

“We expect ongoing positive news flow regarding the disposal of its Hapag-Lloyd stake,” WestLB’s Kaufeld and Moers wrote.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net

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