Tourism giant TUI back in black, eyes post-merger boost
German tourism and travel giant TUI said Wednesday that sales and underlying profits were on course to grow this year and likely be boosted by an imminent merger with its British subsidiary.
The group, which runs its financial year from October to September, said in a statement that it expected a two to four percent jump in sales for 2014-2015.
It said underlying or operating earnings, as measured by earnings before interest, tax and amortisation (EBITA), were set to reach around one billion euros ($1.2 billion), a 10-15 percent rise.
TUI said the forecasts were expected to stand after its merger with TUI Travel to create the world's biggest tourism operator, due to officially go through this week.
The company said net profit for the current fiscal year was back in the black, at 104.7 million euros after the previous year booked a loss of 11 million euros.
The improvement was partly due to lower interest costs and one-off expenses.
Fritz Joussen, chief executive of TUI, said in the statement that the company had "significantly outperformed" against its targets.
"We have now launched the growth phase, which will gain momentum through the successful merger with TUI Travel PLC," he added.
"As a fully integrated tourism group, we are perfectly positioned for further, accelerated growth in the future."
Britain's TUI Travel and Germany's TUI finalised the terms of their merger in September.
The merger will lead to synergies, Joussen said during a telephone conference, adding, however, there would not be "big lay-offs". "Our employees don't have to worry," he said.
The new company will have 74,000 employees and a combined stock market capitalisation of 6.5 billion euros.
It will be based in Germany but have shares mostly listed on the London stock exchange from December 17.
On the Frankfurt stock market, shares in TUI had slipped 0.18 percent to 13.58 euros at 1030 GMT on a slightly higher mid-cap MDAX index.
TUI Travel last week announced a surge in annual profits.
Analysts at Berenberg bank said the merger would simplify the company structure and lead to "both operational and tax-based synergies, which we believe are worth around 900 million euros to shareholders".
© 2014 AFP