TUI AG Reports Net Profit for Fiscal 2023

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TUI AG experienced a significant boost in shares, with an increase of up to 7.6% in early trade. The company reported a swing to net profit for fiscal 2023, supported by record-breaking revenue. Furthermore, TUI AG forecasts a minimum 10% revenue growth for the upcoming year.

At 0806 GMT, shares rose by 32.0 pence or 6.25%, reaching 544.0 pence. They hit a peak of 551.54 pence shortly after the market opened.

TUI AG, a German travel operator listed in London, revealed on Wednesday that winter 2023-24 bookings increased by 11%, while average prices saw a rise of 5%. As of now, 56% of the winter program has already been sold, reflecting performance similar to that of the previous year. Additionally, the company has sold 14% of its summer 2024 program, with bookings exhibiting a growth of 13% and average prices increasing by 4%.

The net profit for the fiscal year ending on September 30 amounted to €305.8 million ($330.2 million), signifying a significant improvement compared to a loss of €277.3 million in the same period last year. This figure falls slightly below the FactSet profit consensus of €340.6 million.

Earnings before interest and taxes (EBIT) reached €999.3 million, a notable increase from €320.0 million in the previous year.

Notably, TUI AG’s preferred metric, underlying EBIT, which excludes exceptional and one-off items, totaled €977.2 million, demonstrating substantial growth from €408.7 million and coming close to the consensus of €1.01 billion.

TUI Expects Strong Earnings Growth in the Coming Year

TUI, a leading travel and tourism company, is predicting a significant increase in its underlying EBIT (earnings before interest and taxes) for the year ahead. The company anticipates a growth rate of at least 25%, with a long-term target of achieving a 7% to 10% rise in underlying earnings.

In the previous fiscal year, TUI achieved notable revenue growth, reaching EUR20.665 billion compared to EUR16.54 billion the year before. This surpasses the consensus estimate of EUR20.39 billion.

TUI attributes its impressive performance to its ongoing transformation program. While certain segments, like the tour operator business, are currently undergoing transformation to regain profitability, the hotels and cruises sectors are identified as areas of growth that are also highly profitable.

Chief Executive Sebastian Ebel emphasizes the company’s commitment to enhancing profitability, efficiency, and overall strength across all segments. He remains optimistic about future improvements based on the positive winter bookings and early indications for the upcoming summer season. Ebel expects further positive momentum in 2024.

In other news, David Schelp has been appointed as the new Chief Executive Officer of Markets & Airlines, effective January 1st. He will be replacing David Burling, who will step down from his position on January 5th. Schelp brings a wealth of experience to the role, having previously held various management positions at TUI since 2002. His most recent position was as CEO of TUI Musement.

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