Tour operator TUI AG (LON:TUI) plunged as it reported another half-year loss and reported a slowdown in summer bookings amid subdued demand for Turkey and North Africa holidays.
Shares fell 4.29% to 1,139.0p in afternoon trading.
The group's loss narrowed to €362.9mln in the first half from €448.9mln in the year-ago period and revenue increased to €6.6bn from €6.1bn at constant currency rates, boosted by bookings for its cruises, hotels and resorts.
Reported customer numbers rose 3%, driven by a higher proportion of long-haul travel, higher selling prices in the UK for destinations in the eurozone and the acquisition of French tour operator business, Transat.
However, summer bookings from UK customers were flat compared to a 3% increase in February while revenue slowed to 8% from 12%.
Security concerns have hurt tourism in Turkey, Egypt and Tunisia with travellers opting for European destinations such as Spain and Portugal.
Still, TUI said bookings for summer this year are in line with expectations as a continued weakness in Turkey and North Africa bookings was offset by strong demand for trips to Spain, the Canary Islands, Greece, Cyprus, Cape Verde and the Caribbean.
For winter, trading has closed in line with expectations on the back of further expansion in hotel and cruise brands. The company has opened new hotels in its Riu, TUI Blue, Blue Diamond brands and launched new cruise ships, Mein Schiff 6 and TUI Discovery.
TUI reiterates full year guidance...
The company reiterated its full year guidance for least 10% growth in underlying earnings (EBITA).
In the first half underlying EBITA at constant currency, excluding the impact of a later Easter this year, improved to a loss of €193.3mln from a loss of €206.4mln the previous year on a like-for-like basis.
“Whilst the turbulent macroeconomic and geopolitical backdrop is evident in certain destinations and markets, our operational experience, integrated model and balanced portfolio of markets and destinations mean that we are well placed to deal with these challenges and continue to deliver sustainable growth into the longer term,” TUI said in a statement.
TUI said demand from UK holidaymakers remained resilient despite Brexit.
The group added that its €281mln disposal of Travelopia to private equity firm KKR was on track to be complete in the second half.
ShoreCap rates TUI a 'buy'...
Shore Capital reiterated its full year guidance, which also sees a 10% rise in underlying EBITA, and issued a 'buy' rating on the stock. The broker expects TUI will benefit from the launch of its newest cruise ships and the expansion of its hotels and resorts business in the second half.
"We would expect an improved performance in the second half," said ShoreCap analyst Greg Johnson. "The group continues to make progress on its key key performance indicators of direct bookings and unique content."
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