* Year underlying EBITA 746 mln euros, vs forecast 681 mln
* Says will not pay dividend for 2011/12
* Net debt down 639 mln euros to 178 mln
* Shares rise 4 percent
FRANKFURT, Dec 19 German travel and tourism
group TUI AG said a merger of Hapag-Lloyd
with a rival would increase the value of its investment in the
container shipper, as it looks for a good time to exit the
Along with a 56 percent stake in world's largest tour
operator TUI Travel, TUI AG also owns 22 percent of
Hapag-Lloyd, which said on Tuesday it was in merger talks with
rival Hamburg Sued.
TUI has long been wanting to exit Hapag-Lloyd to focus fully
on tourism and has the option to either sell its stake to a
third party or call for a flotation, which depends on the stock
market picking up.
"A merger would be positive because it would increase the
value of both companies and so the value of our investment would
rise," Chief Executive Michael Frenzel said on Wednesday after
TUI AG reported a better-than-expected 24 percent rise in annual
He said a deal would create the world's fourth-largest
shipping company in a sector where size is important and bring
benefits through the combination of operations and economies of
"These talks do not change our decision to exit the
industry," he added.
Shares in TUI AG, which has cut its stake in Hapag-Lloyd to
22 percent from 38.4 percent this year, were up 4.06 percent at
8.15 euros at 1233 GMT, the second highest mid-cap riser in
Selling part of its stake in Hapag-Lloyd enabled TUI AG to
reduce its net debt by 78 percent over the course of the year to
178 million euros ($235.2 million) as at end-September.
Despite this, and an improvement in profits as TUI Travel
grabbed market share in the UK and TUI AG's own hotels business
pushed through higher prices, Frenzel said TUI would not be
paying a dividend for the year to end Sept 2012.
"We have an excellent operating performance, but on the net
EPS side we're still negative," he said, adding the group would
prefer to concentrate on consolidating its finances so that it
could take advantage of any strategic opportunities that may
arise in the tourism sector.
TUI has long been expected by analysts to buy out the
minority stake in TUI Travel. When asked if there were such
plans, Frenzel said he would not "speculate" on any strategic
For the year to end-September, TUI said underlying earnings
before interest, tax and amortisation (EBITA) reached a record
745.7 million euros, beating expectations in a Reuters poll for
681 million euros. Turnover matched expectations at 18.3
On a net basis, TUI posted a loss per share of 0.16 euros,
compared with a loss of 0.01 euros last year, hurt by its stake
in loss-making Hapag-Lloyd, which wiped 49 million euros off its
Frenzel, who will hand over the CEO reins to Friedrich
Joussen in February, said bookings had been good throughout
October, November and December.
"The economic environment is still tough, but people still
want to go on holiday, judging by our results and trading at the
start of our new financial year," he said.
TUI Travel had published results on Dec 4.