Yahoo Finance Tui hits profit milestone as it prepares to ditch Thomson name
Tour operator Tui has for the first time in its history been profitable in the first nine months of a financial year as it prepares to rebrand in the UK.
Chief executive Fritz Joussen said the strategy of combining its hotel and cruise businesses with its tour operator had now proven itself and showed investors the company’s earnings were less seasonal.
Typically the company's profits have been skewed to one end of the year, when people pay for their holidays.
He said demand for hotels and cruises fluctuated far less throughout the year than that of flights and package holidays, meaning the company was on a better footing.
The group said its underlying earnings before interest, tax and amortisation had hit €7.3m (£6.6m) for the nine months to June 30 - a massive turnaround from the €45.5m loss recorded in the same period in 2016.
The comments came as the company prepares to roll out the Tui brand across the UK before the end of the year, meaning the Thomson name will disappear.
Mr Joussen said the rebrand had been successful in the Nordics and Belgium, suggesting it helped sales in those markets.
The chief executive said 88pc of its summer holiday schedule was sold, in line with last year, but that this was equivalent to a 4pc rise in the number of people booked to travel thanks to strong demand for the likes of Greece, Bulgaria and long-haul destinations.
He said demand from the UK “remains resilient” in spite of the fact travelling overseas has become more expensive for Britons as the weaker pound translates into less holiday money.
Asked about a return to Tunisia following the recent change in advice by the UK’s Foreign & Commonwealth Office, Mr Joussen said the company would consider it if demand was there, but no decision had been made yet. In summer 2015 the operator cancelled trips to the North African country after a terror attack in Sousse.
Elsewhere, the disposals of Travelopia to KKR for £325m and the remaining shares in Hapag-Lloyd AG for €407m this year meant net debt now stands at €800m. Mr Joussen said the company was considering whether to use the proceeds to fund the acquisitions of two new cruise ships.
