Tui AG closes in on €1 billion profit target

Tui AG closes in on €1 billion profit targetA target of €1 billion in core profit for Tui AG is coming into reach in the current year as it reported its final set of results ahead of its merger with Tui Travel.

Chief executive Fritz Joussen said the new group’s turnover would rise between 2% and 4% in the current financial year to the end of September 2015.

This came as the German travel group reported turnover up by 1% to €18.71 billion and the operating result rising by 14% to €868.5 million in 2013/14.

London-listed Tui Travel and major shareholder Tui AG reached an agreement in September on the terms of a €6.5 billion merger to create the world’s largest leisure tourism group.

The deal will complete on December 17, with a name for the new group to be announced next week.

Tui AG is now investing in growth after a period of restructuring, expanding its hotel portfolio and buying more cruise ships for Tui Cruises. Joussen said the merger with Tui Travel would give the growth plans further momentum.

Its luxury and expedition cruise arm Hapag-Lloyd Cruises division,  which has struggled to turn a profit, would break even in 2014/15, he said.

“We have delivered on our promises: We have significantly outperformed against our earnings targets,” said Joussen.

“Our efficiency programme has been implemented consistently and is truly paying off.

“We have now launched the growth phase, which will gain momentum through the successful merger with Tui Travel.

“As a fully integrated tourism group, we are perfectly positioned for further, accelerated growth in the future. This will create value for our shareholders and secure jobs in the long term.”

Sourced from Travel Weekly

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