20th Dec 2019 17:15
Alliance News) - Moody's Investors Service said Friday it has downgraded the corporate family rating of the German tourism company TUI AG to Ba3 from Ba2 and retained its negative outlook.
Vitali Morgovski, Moody's assistant Vice President-Analyst and lead analyst for TUI said: ""Our decision to downgrade TUI's ratings reflects the deterioration in the group's credit metrics following the weak performance in fiscal 2019, which was affected by exceptional costs related to Boeing 737 Max grounding."
"As a consequence of the weakening profitability combined with ongoing growth investments, free
cash flow continued to be negative, burdening TUI's liquidity profile", Morgovski noted.
The negative outlook reflects ongoing challenges in 2020, including the persistent overcapacity in the German flight market, slowing economic growth which could hurt consumer sentiment, Brexit and potential elevated costs in case the Boeing 737 Max remains grounded, Moody's said.
TUI shares closed broadly flat in London at 948.00 pence each on Friday.
By Loreta Juodagalvyte; [email protected]
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