11th Feb 2020 07:03
(Alliance News) - Anglo-German holiday operator TUI Group PLC on Tuesday reported a sharply widened first quarter adjusted loss and tweaked its guidance range for underlying annual earnings due to grounding of Boeing Co's 737 Max aircraft.
For the three months to December 31, the company's underlying loss before interest & tax widened 77% to EUR146.9 million from EUR83.1 million the year prior. This was despite revenue rising 7.7% to EUR3.85 billion from EUR3.57 billion the year before.
The widened underlying loss was attributed to a weak performance in the company's Holiday Experiences unit, higher fuel costs in Cruise business, a EUR45 million replacement cost relating to grounding of Boeing 737 Max aircraft and EUR29 million headwind from non-repeat of a hedging gain.
The aircraft grounded by aviation regulators last year following two fatal crashes.
First quarter underlying earnings before interest, tax, depreciation and amortisation multiplied to to EUR111.5 million from EUR27.2 million the year prior. Net loss narrowed by 5.9% year-on-year to EUR105.5 million.
TUI is predicting to record a high single digit percentage growth in financial 2020 revenue, versus previous mid-to-high single digit percentage growth guidance, due to currently strong trading trends in its Markets & Airlines business.
Annual EBIT is now expected to be between EUR850 million to EUR1.05 billion versus previous EUR950 million to EUR1.05 billion guidance range. The tweak in annual EBIT estimate was attributed to Boeing's intention to return 737 MAX to service by mid-2020 as compared with previous April return to service estimate.
The company has narrowed costs related to the grounding of 737 Max to between EUR220 million and EUR245 million versus previous EUR220 million to EUR270 million range. It said that it has secured replacement capacity for the entire financial 2020.
By Tapan Panchal; [email protected]
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