Kuoni to Exit Southern Europe, Dutch Tour Operating Units
Kuoni Reisen Holding AG (KUNN), Switzerland’s largest travel company, rose to a one-month high on optimism the disposal of smaller tour-operating businesses will leave the remaining company with better growth prospects.
The stock gained as much as 3.5 percent to 269 Swiss francs, the highest intraday price since Aug. 22. The shares were up 2.3 percent at 266 francs as of 9:51 a.m. in Zurich.
Kuoni will shut or sell unprofitable units in countries such as Italy and Spain with combined annual revenue of about 300 million Swiss francs ($322 million), the Zurich-based company said today in a statement. The measures will probably reduce earnings before interest and taxes this year by about 80 million Swiss francs, Kuoni said.
This “will pave the way to unveil the attractiveness of the remaining core business from 2013 onwards,” Patrick Hasenboehler, an analyst at Bank Sarasin, wrote in a note to investors. He has a buy recommendation on the stock.
The planned exit reduces a profit forecast Kuoni made Aug. 23 that was below analysts’ estimates at the time. The stock fell 8.7 percent that day after the company said it expected full-year earnings before interest, tax and amortization exceeding 130 million francs and Ebit of more than 90 million francs.
“Management has now the possibility to restore its credibility,” Jean-Philippe Bertschy, an analyst at Bank Vontobel, wrote in a note to clients. He has a buy recommendation on the stock.
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