TUI Reiterates Earnings Forecast as First-Quarter Loss Narrows

TUI AG (TUI1), the owner of Europe’s largest tour operator, reiterated its full-year sales forecast after trimming its first-quarter loss.

TUI still sees revenue rising by 2 percent to 4 percent this year, with the operating result expected to rise 6 percent to 12 percent, it said in a statement today. The net loss in the three months through December narrowed 22 percent to 108.7 million euros ($148 million), while the operating loss was little changed at 140.6 million euros. Sales fell 2.9 percent to 3.39 billion euros on unfavorable currency swings.

“In the first quarter, we got off to a good start to the new financial year. I am confident that we will achieve our economic targets,” Chief Executive Officer Friedrich Joussen said in the statement.

Joussen, who took over a year ago, started an efficiency plan that includes cutting more than half of the jobs at the company’s Hanover, Germany headquarters, ending sponsoring agreements and selling the corporate jet to generate 1 billion euros in operating profit next year. The push includes strengthening weaker hotel brands and steering the cruise business to profitability to make TUI a stable dividends payer.

TUI Travel Plc (TT/), the tour operator in which TUI AG owns 54 percent, said Feb. 6 its underlying operating loss narrowed by 6.9 percent to 108 million pounds ($178 million) as it reduced offerings in France and sold more holiday packages online. TUI Travel reiterated a forecast to raise underlying operating profit by 7 percent to 10 percent this year, excluding currency shifts.

Joussen has yet to announce which of TUI’s major hotel brands will remain with the company, so far only marking the Riu chain and Robinson Clubs as essential. That leaves the future of more than 100 hotels uncertain, including the Grecotel, Grupotel and Iberotel brands.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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