TUI – higher volumes of sun-seekers fuels TUI’s take-off
- Third-quarter revenue rose 19% to €5.3bn
- Underlying operating profit of €169.4m, up from a loss of €27.0m
- Net debt improved from €3.3bn to €2.2bn
Aarin Chiekrie, equity analyst at Hargreaves Lansdown:
“Demand is looking brighter as travel rebounds, and flight capacity at the start of the important summer season has been firing on all cylinders. A total of 5.5m customers enjoyed a holiday with TUI in the quarter, up by 9% on the prior year. And supported by these higher volumes of sun-seekers as well as price hikes, revenues soared upwards at double-digit rates.
TUI doesn’t just run flights, it has a much wider package holiday business. In some ways that makes it more defensive – there’s more to offer and plenty of cross-selling opportunities. But the drains on cash when you have planes, huge hotels and even cruise ships to fill are enormous. So returning to pre-pandemic levels is key and good progress is being made on this front.
Debt levels have improved significantly over the year, helped by a recent €1.8bn rights issue as well as positive free cash flows. But standing at a mighty €2.2bn, the debt level’s still eye-watering compared to profits, meaning dividends are likely off the table for now.”
For access to stock reports and articles please visit the Hargreaves Lansdown share research homepage or sign up to our updates here.
