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Germany’s TUI reports 42% profit fall
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Group profit attributable to shareholders of Europe’s largest tourism company TUI declined by 42.8 percent to 416.2 million euros (US$461.79 million) in fiscal year 2019, the German company announced on Wednesday.
According to Fritz Joussen, chief executive officer of TUI, the company delivered a “successful financial year 2019.”
At the same time, underlying earnings before interests, taxes and amortization (EBITA) of the company which has registered offices in the German cities of Berlin and Hannover declined by 21.8 percent to 893.3 million euros.
The main reason for the “drastic decrease of EBITA” was the grounding of TUI’s Boeing 737 MAX fleet. The company’s 15 such aircraft were taken out of operation and replacements had to be rented to maintain services.
Following two crashes of Boeing’s 737 MAX in Indonesia and Ethiopia that killed 346 people, the model has been banned from flying worldwide since March.
Without the expected negative financial impact of the grounding of its 737 MAX planes, TUI’s underlying EBITA would be in line with the “record level delivered in 2018.”
The TUI Group’s turnover increased by 2.5 percent year on year to 18.9 billion euros in 2019. TUI reduced the dividend to 54 eurocents from 72 eurocents per share and announced to further increase it in the 2020 fiscal year in order to create “reliability for shareholders and leeway for the expansion of the digital business, investments in hotels and supported by a robust balance sheet policy.”
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