Tourism is strong, shipping is struggling, TUI says
The German company said it expects stable earnings in its tourism sector and that it even plans to expand the TUI travel division.Frankfurt -- TUI, the leading European tour operator, voiced optimism Wednesday on prospects for its tourism activities this year but was downbeat on its maritime shipping unit.
TUI posted an operating profit of 602 million euros (810 million dollars) for 2008, an increase of 30 percent, on a 14 percent rise in sales to around 25 billion euros.
Net profit fell however to 142 million euros owing to restructuring costs, a company statement said.
This year, TUI expects to record a "positive net result" but will likely see a drop in its operating profit, boss Michael Frenzel said in the group's annual report.
In the tourism sector, TUI forecast stable operating earnings at most units and even an increase at its TUI Travel division.
But prospects for the Hapag-Lloyd shipping container company this year were less bright, the statement said.
Most of its shares are being sold to German investors, while TUI is to retain a stake of 43.33 percent in the unit, which will likely see "a substantial decline in revenues" that would also affect its earnings.
Maritime shipping has slumped owing to a decline in global trade associated with the economic crisis.
TUI said it would implement a cost savings programme aimed at trimming 365 million dollars (270 million euros) from Hapag-Lloyd's expenses, by cutting deliveries to Asia and freezing hiring.
The German group also said it would shift its fiscal year and begin it on October 1 to better correspond with global tourism seasons.