7th Feb 2019 07:01
LONDON (Alliance News) - TUI Group PLC said late Wednesday that annual earnings for its current financial year will be "broadly stable" on last year due to "extraordinary" hot weather and the weakness of the pound.
For the year ending September 30, the travel operator said it expects adjusted earnings before interest, taxes, depreciation and amortisation to be broadly stable on the record performance in the prior year of EUR1.17 billion.
"Consequently, we are not reiterating our guidance of at least 10% [compound annual growth rate] in underlying Ebitda at constant currency for the three years to FY20," the company said.
TUI said that the out-of-the-ordinary hot weather in the summer resulted in later bookings, weakening margins. It also cited the "continued weakness of the pound sterling, making it difficult to improve margins on holidays sold to UK customers".
Furthermore, a shift in demand from the western to the eastern Mediterranean created overcapacity in certain destinations such as Spain's Canary Islands, it added.
"Previously, it was anticipated that these headwinds would impact primarily the first half (Winter), however we are seeing from current bookings an additional impact on the second half (Summer), and have updated our guidance accordingly," TUI added.
TUI on Wednesday also confirmed its proposed dividend of 0.72 euro cents per share for financial 2018 and said that its growth strategy remains "intact".
"Despite the challenges experienced by Markets & Airlines, demand for leisure travel continues to grow in our core markets. We have positioned TUI to benefit from this through the successful transformation as an integrated provider of Holiday Experiences, based on its strong strategic and financial position," TUI concluded.
The company will release its first quarter results on February 12.
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