Tui shares slump as losses widen after quitting London
Shares in Tui have slumped as losses widened despite a bumper performance from its cruise segment.
Underlying operating losses increased by €18m to €207m (£174.3m) even as second quarter revenue rose from nigh-on breakeven to €3.7bn.
Shares were trading down around the 11 per cent mark in early deals on Wednesday.
The travel operator did benefit from a strong performance from its cruises business, where profit grew at double-digit rates to record levels following the launch of two new ships.
Tui said the period had been weighed on by “economic challenges” in Europe as well as a later Easter this year.
Stripping out the timing difference, underlying operating profit would have been around €32m better off.
Chief executive Sebastian Ebel said: “The environment was challenging. And the second half of the year will also remain demanding for the overall economy in Europe.
“Our integrated and diversified business model with its activities in Europe and increasingly also outside Europe, proved its worth again in the second quarter.”
He added: “Our focus is now on the important summer business. We are offering more and more products in more destinations for existing and new customers.”
Tui’s London exit fails to impress
Shares in Tui have failed to impress since the travel operator ditched the UK for Germany. They are down around three per cent in the last 12 months.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “The current challenging economic backdrop makes it hard to map the demand picture accurately.
“Some signs of softness in Germany are something to keep an eye on, and investors will be keen to see the print here pick up in the second half.
He added: “Good late bookings and positive momentum on pricing mean that full-year guidance has been maintained, pointing to underlying operating profit growth of between 7-10 per cent.”