Club Med returns to profit, says confident on outlook
French leisure group Club Med said on Friday it returned to profit in its first half despite a flat European holiday market and was positive on the outlook.
The company also said it was in talks on a cooperation accord with a Chinese group as part of its strategy to build up its business there to five holiday villages with 200,000 clients annually by 2015.
It did not give the name of the Chinese group but said the long-term strategic party might eventually take a stake in the company.
Earlier this year, Club Med said it would open a Club Med ski village in China in a deal with Melco China Resorts.
Club Med shares jumped on the news the company returned to profit, adding more than severn percent in early Paris trading.
The company said it had made a net profit of three million euros (3.6 million dollars) in the six months to March 2010, compared with a net loss of 22 million euros a year earlier.
Chief executive Henri Giscard d'Estaing welcomed the results and said "it is with confidence that we look to the years ahead."
The core holiday village business posted an operating profit of 28 million euros, up 16 percent.
Sales, however, fell 5.5 percent from a year earlier to 679 million euros as client numbers dropped 4.5 percent, reflecting the muted European market.
Club Med said the eruption of the volcano in Iceland which closed European airspace for a week in April cost it some 5.6 million euros.
Current bookings overall were down 0.9 percent, it said, with Europe off 4.4 percent while the Americas rose 13.8 percent and Asia 18.1 percent.
© 2010 AFP