TUI Has Worst Start in 4 Years as Joussen Takes Over as ChiefRichard Weiss
TUI AG, the owner of Europe’s largest travel company, reported its biggest first-quarter loss in four years as the company gets a new chief executive officer for the first time in almost two decades.
The net loss widened by 56 percent to 137 million euros ($184 million) in the three months through December, as a positive tax effect from the previous year wasn’t repeated and as an accounting change at TUI Travel Plc took effect.
Shareholders are eager to learn how Friedrich Joussen, 49, the former Germany head of Vodafone Group Plc, will change TUI’s strategy when he takes over as CEO after the company’s annual shareholder meeting in Hanover, Germany today. The shares declined 34 percent under Michael Frenzel, 65, who headed TUI and Preussag, as the company used to be called, for 19 years. Germany’s MDAX benchmark index for medium-sized companies rose more than five-fold in that period.
TUI confirmed its outlook for fiscal 2013 today, saying it expect sales to rise “moderately” while operating profit will remain at last years’ level. Net income before minority interests will be positive, TUI said.
First-quarter sales rose 1.4 percent to 3.5 billion euros on higher revenue at the cruise ship unit and from hotel operations.
TUI on Jan. 23 said it retreated from a plan to combine with TUI Travel, in which it owns a majority stake, succumbing to investor pressure to drop a share-based deal only a week after saying the two companies were in preliminary talks. The company is barred by U.K. takeover rules to make a fresh approach for the U.K. company for six months.