* Q2 underlying EBITA loss 205 mln eur vs Rtrs poll 223 mln
* Sees 2013/14 profit at top end of range, sales at lower
* 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
However, no decisions have been taken yet. "Every ship is a
huge investment and every ship will be very carefully planned,"
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.
(Additional reporting by Daniela Pegna; Editing by Ludwig
Burger/Greg Mahlich/Susan Fenton)