LONDON (Reuters) - Thomas Cook (TCG.L) swung to a third quarter profit and said it had it halved its debt pile in the latest stage of a turnaround at the world’s oldest travel firm.
The 172-year old group is recovering after a dramatic slump in sales over the last two years, hit by the euro zone debt crisis, high fuel costs and social and political turmoil in popular holiday destinations such as Greece, Egypt and Tunisia.
The tour operator on Thursday reported earnings before interest and tax (EBIT) of 1 million pounds ($1.52 million) in the three months to July, up from the 45 million pound loss it reported in the same period a year ago.
Pretax losses for the nine months to the end of June reduced by 30 percent to 470 million, while nine month revenues were largely flat at 5.58 billion pounds, the company said.
Thomas Cook, which completed a 1.6 billion pound refinancing plan earlier this year, said it more than halved its net debt to 452 million pounds in the last 12 months.
It has sold 85 percent of planned capacity for the summer 2013 season and has 9 percent fewer packages left to sell in the ‘late’ market than last year.
“We are optimistic that we will maintain satisfactory prices and margins during the remainder of the summer season,” said chief executive Harriet Green.
“We do, however, recognize that the ‘lates’ market last year was particularly strong due to inclement weather throughout much of Europe, which has not been replicated this year.”
The tour operator, which is halfway through its three-year turnaround plan, said it delivered an additional 31 million of cost cuts during the quarter, taking the cumulative total for 2012-13 to 138 million pounds.
As such, the company increased the profit improvement target by 10 million pounds to 400 million pounds by 2015.
Reporting by Rhys Jones; editing by James Davey