Travel group Thomas Cook issues profits warning
Travel firm Thomas Cook warned on Wednesday that annual profits would be at the low end of market expectations due to the uncertain trading environment in Britain and the weaker euro.
Thomas Cook sank into a loss in the third quarter of the group's financial year, it added in a results statement, citing the impact of the volcanic ash cloud chaos in April and the poor economic climate.
"As we enter the final quarter, it is apparent that trading in the UK business is softer than expected and, at current rates, the recent weakening of the euro will have an adverse impact on translation of our euro-based earnings," said chief executive Manny Fontenla-Novoa.
"As a result, we now anticipate underlying operating profits for the full year -- excluding the impact of the volcanic ash cloud -- to be at the lower end of market expectations."
Thomas Cook added Wednesday that pre-tax losses stood at 116.6 million pounds (141 million euros, 184 million dollars) in the three months to June.
That compared with a slender pre-tax profit of 2.9 million in the same part of last year.
The news comes one day after rival TUI Travel had also warned that its annual earnings would fall short -- and posted widening losses due to difficult conditions in Britain and volcanic ash cloud turbulence.
Thomas Cook added that flight cancellations caused by the volcanic ash cloud from Iceland earlier this year had cost the group 81.9 million pounds. That was higher than the original estimate of between 60-80 million.
"We always expected this year to be challenging given the uncertain economic environment and the impact of the weak sterling on our UK business," said Fontenla-Novoa.
"In anticipation, we cut winter capacity, chose not to increase overall summer capacity, and have continued to address our cost base," he noted.
© 2010 AFP