TUI posts Q2 loss of $764 million
TUI AG, the German owner of Europe’s largest travel company, said its second-quarter loss widened on costs related to loans for the troubled Hapag-Lloyd container- shipping business.
The net loss widened to 537 million euros ($764 million), or 2.16 euros a share, from 56.4 million euros, or 24 cents, a year earlier, the Hanover, Germany-based company said today in a statement. That was a greater shortfall than the 136 million- euro average loss estimated by four analysts surveyed by Bloomberg News. Sales fell 12 percent to 4.18 billion euros.
TUI said interest-rate effects on loans given to Hapag hurt results by 371 million euros. TUI, which sold about 57 percent of Hapag to a group of investors in March and retains the biggest stake in the company, last month agreed to help the shipping line, contributing 215 million euros to the purchase of a container terminal.
“There is no real turnaround for the slumping container business in sight though the speed of decline is slowing down,” said Martina Noss, an analyst at Norddeutsche Landesbank in Hanover, before the results were released. She has a “hold” rating on the shares.
The container line’s transport volumes fell 17 percent in the global recession and a glut of new vessels contributed to a 25 percent decline in freight rates. TUI and the Hapag investors are in talks to secure future financing of the container line, a condition for a planned bid for government loan guarantees. No agreement has been reached.
Hapag Loss
The loss from TUI’s stake in Hapag was 121 million euros. TUI said today that the container line needs financing of 1.95 bullion euros, 200 million euros more than previously expected. The shareholder contribution should be 750 million euros while 1.2 billion euros should come from government guaranteed bank loans, the company said.
TUI plays the “role of a bank” for Hapag, TUI Chief Financial Officer Rainer Feuerhake said on a conference call. The company had to make a risk evaluation for the loans it gave to the shipping line, which lead to the negative effect on earnings, he said. TUI expects a positive impact from the evaluation as soon as the global container business recovers, the CFO said.
TUI today said it began an “asset streamlining program,” which will see the refinancing of real estate, hotels and cruise ships through 2012, as well as some disposals.
Net Debt
Net debt rose to 2.63 billion euros as of June 30, from 2.58 billion euros at the end of the previous quarter.
The company’s tourism unit, TUI Travel Plc, said yesterday that quarterly profit was 33 million pounds ($54.5 million) compared with a loss of 216 million pounds a year earlier, when the results were hurt by one-time costs of 286 million pounds.
TUI said it now expects an operating result for its entire tourism business, including hotels and cruise ships, “slightly” below last year but still “satisfying.” Earlier TUI had said the business will be “stable” in 2009. The company reiterated that it still expects a positive full-year result for the group.
Shares in the company fell 3 cents, or 0.6 percent, to 4.71 euros in Frankfurt trading yesterday, giving the company a market value of 1.18 billion euros.
The net loss widened to 537 million euros ($764 million), or 2.16 euros a share, from 56.4 million euros, or 24 cents, a year earlier, the Hanover, Germany-based company said today in a statement. That was a greater shortfall than the 136 million- euro average loss estimated by four analysts surveyed by Bloomberg News. Sales fell 12 percent to 4.18 billion euros.
TUI said interest-rate effects on loans given to Hapag hurt results by 371 million euros. TUI, which sold about 57 percent of Hapag to a group of investors in March and retains the biggest stake in the company, last month agreed to help the shipping line, contributing 215 million euros to the purchase of a container terminal.
“There is no real turnaround for the slumping container business in sight though the speed of decline is slowing down,” said Martina Noss, an analyst at Norddeutsche Landesbank in Hanover, before the results were released. She has a “hold” rating on the shares.
The container line’s transport volumes fell 17 percent in the global recession and a glut of new vessels contributed to a 25 percent decline in freight rates. TUI and the Hapag investors are in talks to secure future financing of the container line, a condition for a planned bid for government loan guarantees. No agreement has been reached.
Hapag Loss
The loss from TUI’s stake in Hapag was 121 million euros. TUI said today that the container line needs financing of 1.95 bullion euros, 200 million euros more than previously expected. The shareholder contribution should be 750 million euros while 1.2 billion euros should come from government guaranteed bank loans, the company said.
TUI plays the “role of a bank” for Hapag, TUI Chief Financial Officer Rainer Feuerhake said on a conference call. The company had to make a risk evaluation for the loans it gave to the shipping line, which lead to the negative effect on earnings, he said. TUI expects a positive impact from the evaluation as soon as the global container business recovers, the CFO said.
TUI today said it began an “asset streamlining program,” which will see the refinancing of real estate, hotels and cruise ships through 2012, as well as some disposals.
Net Debt
Net debt rose to 2.63 billion euros as of June 30, from 2.58 billion euros at the end of the previous quarter.
The company’s tourism unit, TUI Travel Plc, said yesterday that quarterly profit was 33 million pounds ($54.5 million) compared with a loss of 216 million pounds a year earlier, when the results were hurt by one-time costs of 286 million pounds.
TUI said it now expects an operating result for its entire tourism business, including hotels and cruise ships, “slightly” below last year but still “satisfying.” Earlier TUI had said the business will be “stable” in 2009. The company reiterated that it still expects a positive full-year result for the group.
Shares in the company fell 3 cents, or 0.6 percent, to 4.71 euros in Frankfurt trading yesterday, giving the company a market value of 1.18 billion euros.
