Wednesday, February 28, 2024

TUI Swings to Adjusted EBIT Profit on Strong Travel Demand — Update

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By Anthony O. Goriainoff

TUI said it swung to an underlying EBIT profit for the first quarter of fiscal 2024 on a strong travel demand and a robust operating performance, as customers rose 6% to 3.5 million.

The German travel operator–which is seeking to delist from the London Stock Exchange–said Tuesday that its momentum continued as year-on-year bookings were up 8% for both the current winter, and summer 2024 seasons. The company said it currently has recorded a total of 9.4 million combined bookings for the current winter season and summer 2024, compared with a combined number of 8.7 million the year before.

TUI said average winter prices were up 4% and that for the coming summer season average prices were also up 4% as demand for all key medium and short-haul destinations was currently up on the year with Spain, Greece and Turkey as its most popular summer destinations.

For the quarter ended Dec. 31 TUI reported underlying earnings before interest and taxes of 6 million euros ($6.5 million) compared with an EBIT loss of EUR153 million the year before. Deutsche Bank analyst Andre Juillard expected an underlying EBIT loss of around EUR76 million.

Constant currency basis underlying EBIT–the company’s preferred metric which strips out exceptional and other one-off items–was EUR14 million, compared with a loss of EUR153 million.

TUI’s net loss narrowed to EUR122.6 million compared with a loss of EUR256.1 million for the comparable period a year earlier.

Revenue for the period was EUR4.30 billion compared with EUR3.75 billion and a forecast of EUR4.14 billion, taken from FactSet and based on two analysts’ estimates.

The company reiterated that it expects underlying EBIT growth of at least 25% and for revenue to increase by at least 10% this year.

“In a persistently challenging environment, people’s high willingness to travel ensures strong economic development in all areas of the group,” Chief Executive Sebastian Ebel said.

TUI said last month that it plans to seek approval to delist its shares on the London Stock Exchange and make Frankfurt its prime exchange, the latest in a line of companies quitting the exchange.

Shareholders will vote on the plan later Tuesday and if approved it expects to delist in London in June and move to Frankfurt’s prime standard market around April 8.

TUI said in December that some shareholders had requested that it review the benefits of a simplified listing structure.

Irish building-materials supplier CRH, which was listed on London’s FTSE 100 index, moved its main listing to New York in September. Flutter Entertainment–which houses FanDuel, PokerStars, and Paddy Power among its brands–started trading in New York on Jan. 29, while maintaining a secondary listing on the main market of the London Stock Exchange. British chip maker Arm Holdings chose New York over London for its stock market return.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

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