TUI AG says full-year profit could exceed guidance after strong quarter
BERLIN (Reuters) - German tourism group TUI AG (TUIGn.DE) said full-year earnings could exceed its guidance after third-quarter profits jumped 83 percent thanks to strong results at its cruises and hotels divisions and at its unit TUI Travel.
TUI AG, currently in merger talks with its 55 percent-owned unit TUI Travel Plc (TT.L), said it expected to "at least" hit the upper end of its forecast range for underlying profit to grow by between 6 and 12 percent.
While TUI AG gets over 80 percent of its earnings from London-listed TUI Travel, Europe's largest tour operator, it also operates its own cruises and hotels divisions.
TUI Travel said last week that it was on track to meet its annual profit goal thanks to growing sales of higher-margin holidays. [ID:nL6N0QE1NG]
TUI AG reported on Thursday third-quarter sales of 4.83 billion euros ($6.5 billion) and underlying earnings before interest, tax and amortization (EBITA) of 163 million euros, above analyst expectations for 141 million, thanks to higher hotel occupancy and rising profits in its cruise division.
It said its cruises division as a whole should achieve a turnaround this year and post a profit, while its Hapag-Lloyd Cruises unit, which is being refocused on luxury and adventure cruises, will move into the black in the next financial year.
"I am therefore more than confident that we will clearly achieve our business and strategic targets," TUI AG Chief Executive Friedrich Joussen said in a statement.
TUI AG and TUI Travel have until Sept. 19 to announce a formal merger proposal but the talks prevent the two from releasing a full interim report.
Shares in TUI AG have lost 17 percent of their value since the proposed deal was announced on June 27, underperforming a 7 percent drop in European travel and leisure stocks .SXTP, as investors worry that the deal would not win approval from the required number of TUI Travel shareholders.