Published On: Thu, Mar 31st, 2016

TUI AG Says It Expects Underlying EBITDA Up 10%


TUI which owns airline brand Thomson said it had seen a lower demand for holidays in Turkey.

Today TUI AG, (LON:TUI) released a pre-closed trading update to investors covering interim results ahead of its interim results on May 11th 2016.

Highlights from the results included Winter 2015/16 closing as expected with the company’s Source Market programme being fully sold. This pushed revenue up by 3% due to higher average selling prices and a strong performance in the Canary Islands, mainland Spain and long-haul destinations.

The company said it remained pleased with current Summer 2016 performance with 47% of their programme sold which is roughly in line with the prior year. TUI saw 2% in growth of bookings and an average increase in selling prices by 1% which has pushed revenue up by an additional 3%.

Performance in the UK was strong with revenue rising by 8% and bookings up 9% which the package holiday company noted as highlighting the continued strength of package holidays.

Due to ongoing tensions in the Middle East and terror attacks Turkish destinations have seen “subdued” demand which the business said it expected whilst Spain and medium/long haul destinations have seen good demand.

Chief Executive of TUI Group, Friedrich Joussen, commented:

“Winter 2015/16 is closing out as expected, with 95% of our Source Market programme sold and increased revenue in all our major Source Markets. We remain pleased with our Summer 2016 trading performance, with both revenue and bookings ahead of last year. The UK continues to demonstrate a strong bookings performance, up 9% on prior year. Hotels & Resorts are performing well overall, benefitting from increased demand in Spain, the Canaries, and long-haul. Cruise is delivering continued growth, driven by strong demand for Mein Schiff 5 which is due to be launched this July. Hotelbeds Group continues to deliver TTV growth and the disposal process remains on track.

The Group has again demonstrated the flexibility of its business model and the ability to remix destination capacities to match demand and as a result demand and pricing has remained resilient overall despite the impact of geopolitical events. Our integrated model with our differentiated range of own accommodation content, combined with strong supplier relationships continue to give us a strong competitive position and sustainable earnings growth. We therefore remain well positioned to deliver underlying EBITA growth of at least 10% in financial year 2015/16 .”

Looking forward TUI said it remained well positioned to deliver full year underlying EBITA growth of at least 10% based on current trading conditions.

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