* Q2 underlying EBITA loss 205 mln eur vs Rtrs poll 223 mln
* Sees 2013/14 profit at top end of range, sales at lower end
* Reaffirms targets for 2014/15
* Considers entering UK cruise market, doubling fleet
* Shares down 2.3 pct on turnover projection concerns (Adds more on share price, turnover outlook)
By Victoria Bryan
FRANKFURT, May 16 German travel and tourism group TUI AG is looking at expanding its hotel and cruise operations as its 'oneTUI' restructuring programme moves from cost-cutting to getting growth.
TUI AG, which owns 55 percent of London-listed TUI Travel , Europe's largest tour operator, aims to generate underlying profits of 1 billion euros ($1.4 billion) in the year ending September 2015, up from 762 million in the 2012/13 year.
Some analysts have cast doubt on the targets recently, but TUI said on Friday the programme was on track and the group was now entering the growth phase of the plan.
"I am talking for the first time about growth today," Chief Executive Friedrich Joussen told reporters after the group reported a smaller-than-expected second quarter loss. "We want more content of our own," he said.
However, TUI shares fell as traders pointed to comments by the group that turnover in the current fiscal year would come in at the lower end of expectations for growth of 2-4 percent.
Joussen said this was because the group had been experiencing more moderate growth in customer numbers, as stated by TUI Travel in its results this week.
Before Friday's statement, the average forecast for sales growth was 3 percent, according to a Reuters poll.
Shares in TUI, which have gained 21 percent over the last year, outperforming a 15 percent gain for the MDax, were down 2.3 percent at 1006 GMT.
Equinet analyst Jochen Rothenbacher, though, said the sales guidance should not be seen as too negative. "TUI confirmed the rest of the guidance and is now very confident to reach it."
He has a 'buy' recommendation on the shares.
While the sales target may be harder to reach, Joussen said TUI would hit the upper range of its target for underlying core profit growth of between 6 and 12 percent this year.
COSTLY CRUISE SHIPS
TUI runs its own hotels and cruises in addition to having the stake in TUI Travel and said it was examining expansion opportunities in these areas.
In its TUI Cruises division it said it was looking at entering new markets, such as Britain, and was considering the possibility of doubling its fleet to between six and eight ships.
However, no decisions have been taken yet. "Every ship is a huge investment and every ship will be very carefully planned," Joussen said.
The cruise market is predicted to grow at between 8 and 10 percent annually until 2018 and is attracting other new investors. British airline and travel business operator Richard Branson is setting up his own $1.7 billion cruise ship division under his Virgin brand.
In hotels, Joussen said its RIU Group unit's return on invested capital was due to increase beyond 12 percent, while its Robinson hotels would see the figure rise to more than 9 percent this year from 6 percent last year.
TUI also intends to announce its own new hotel brand later this year and said it wants to have 50 of its own TUI hotels within three to five years.
To achieve this it will both take on new hotels and refit some of its other non-core hotel brands such as Grecotel and Iberotel under the new brand. It also plans to expand the number of Robinson club resorts to around 40 from 24 in the coming years in places such as the Maldives.
Overall in the second quarter its underlying loss before interest, tax and amortisation (EBITA) widened to 205.1 million euros from 197 million euros in the same period last year, but better than analysts' forecasts for a loss of 223 million. ($1=0.7291 euros) (Additional reporting by Daniela Pegna; Editing by Ludwig Burger/Greg Mahlich/Susan Fenton)