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Feb. 15, 2010, 5:32 a.m. EST

TUI's Net Loss Narrows

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By Hilde Arends

FRANKFURT—German tourism and shipping company TUI /zigman2/quotes/206714402/delayed DE:TUI1 -4.48% AG on Monday reported a narrower net loss in the fiscal first-quarter on reduced administrative expenses and improvements in taxes, and said it remains confident for the remainder of the year.

The Hanover-based firm posted a net loss of €102.8 million ($140 million) in the three months to Dec. 31, compared with a net loss of €155.1 million a year earlier. Sales dropped 15% to €2.95 billion from €3.47 billion.

Four analysts polled by Dow Jones Newswires had expected, on average, a net loss of €153 million on revenue of €2.95 billion.

TUI reported declines in all of its tourism businesses and bookings were lower in all travel markets, as were the number of hotel stays and reservations on board its luxury cruise line. "The German-speaking cruise market reflected the persistently tight economic conditions in the period," TUI said. "Lower bookings were recorded both in the volume market for premium cruises as well as in the niche market for luxury and expedition cruises.:

Sales at TUI Travel PLC, Europe's largest travel company, contracted 15% to €2.8 billion. TUI holds a 52% stake in U.K.-listed TUI Travel, which accounts for the bulk of its earnings.

Tourism companies generally post lower results in the winter season. The most recent results were also hurt by an unfavorable comparison to the year-earlier period, when business wasn't yet affect by the economic downturn.

TUI also owns 43.3% of Hamburg's Hapag-Lloyd, one of the world's largest marine shipping companies. Declines at Hapag-Lloyd contributed €14 million in net losses to TUI for the quarter.

Hapag-Lloyd posted a first-quarter operating loss €21 million, worse than €8 million loss a year earlier, but a substantial improvement from the fourth quarter. Revenue fell 28% €1.2 billion €1.6 billion.

Although Hapag-Lloyd's transport volumes dropped 13% and average freight rates 16% in the first quarter, some "substantial rate increases were achieved," TUI said. The company sold a majority stake in Hapag-Lloyd in March 2009, booking a €990 million gain in the first quarter 2009 from the €3.25 billion disposal.

TUI on Monday also reiterated its outlook of slightly higher adjusted earnings before interest, tax and amortization, or Ebita, for continuing operations for fiscal 2010 and said it still expects stable adjusted Ebita in its tourism business.

The company changed its fiscal year to bring it in line with TUI Travel and, after a short financial year for 2009, the company's financial year now runs from October through September.

Shares of TUI were up 4.5% at ¤6.70 in Frankfurt morning trading.

The Associated Press contributed to this article.

Write to Hilde Arends at Hilde.Arends@dowjones.com

/zigman2/quotes/206714402/delayed
DE : Germany: Frankfurt
3.24
-0.15 -4.48%
Volume: 125,918
Sept. 18, 2020 8:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€282,968
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