26th Apr 2016 05:57
LONDON (Alliance News) - Moody's Investors Service upgraded its rating on travel company TUI AG on Monday to Ba2 from Ba3 following a robust performance for the group in its 2015 financial year, to the end of September, and the first quarter of its new year.
"Our decision to upgrade TUI's ratings reflects the company's strong operating performance in fiscal year 2014-15 and Q1 of the current fiscal year, as well as its continued resilience to geopolitical events. The upgrade also considers the progress made in the merger with TUI Travel PLC and ongoing improvements in TUI's financial profile," said Sven Reinke, vice-president and senior credit officer at Moody's.
Moody's said TUI's key financial metrics are now well within the previously guided target levels for a Ba2 rating, following continued improvements to its operating performance in the year to the end of September 2015.
The ratings agency expects TUI's financial performance to continue to improve in the current financial year, as further synergies from the merger are realised and one-off costs reduce.
Moody's said geopolitical events remain a risk for TUI, including terrorist attacks in key destinations. The company has been able to offset the financial impact of the terrorist attacks in Egypt and Tunisia and the recent drop in demand from Turkey, Moody's said, but is now mow reliant on a stable environment in its most important market, Spain.
By Sam Unsted; [email protected]; @SamUAtAlliance
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