Tui's share price has tumbled as the company reported widening losses, despite a robust performance from its cruise division. The underlying operating loss worsened by €18 million to €207 million (£174.3 million), even though revenue for the second quarter shot up to €3.7 billion from the previous year’s near breakeven.
In early trading on Wednesday, shares experienced an approximate 11% drop, as reported by .
The travel giant did see a bright spot with its cruise business flourishing, delivering double-digit growth in profits to unprecedented levels, aided by the launch of two new ships. Tui acknowledged that the reporting period was adversely affected by "economic challenges" across Europe and the shift of Easter to a later date this year.
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Factor out the impact of Easter's timing, and the firm's underlying operating profit would have been approximately €32 million more favourable.
Sebastian Ebel, Tui's Chief Executive, remarked: "The environment was challenging. And the second half of the year will also remain demanding for the overall economy in Europe."
"Our integrated and diversified business model with its activities in Europe and increasingly also outside Europe, proved its worth again in the second quarter."
He continued, stressing the company's forward-looking strategy: "Our focus is now on the important summer business. We are offering more and more products in more destinations for existing and new customers."
Tui's London exit fails to impress
However, since Tui shifted its primary listing from London to Frankfurt, the stocks haven't rallied as hoped, showing a downward trend of around three per cent over the past year.
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Aarin Chiekrie, equity analyst at Hargreaves Lansdown, commented on the difficulty of assessing demand due to the tough economic climate, saying: "The current challenging economic backdrop makes it hard to map the demand picture accurately."
He also noted potential concerns regarding the market in Germany, mentioning: "Some signs of softness in Germany are something to keep an eye on, and investors will be keen to see the print here pick up in the second half."
Chiekrie went on to highlight the strength in bookings and pricing optimism: "Good late bookings and positive momentum on pricing mean that full-year guidance has been maintained, pointing to underlying operating profit growth of between 7-10 per cent."