(Alliance News) - Tui AG on Thursday said coronavirus badly hurt operations in its most recently ended financial year, and it expects to operate at sharply reduced capacity well into the year ahead.
The Anglo-German holiday operator said revenue for the financial year to the end of September declined by 58% to EUR7.95 billion from EUR18.93 billion, resulting in a pretax loss of EUR3.13 billion versus EUR691 million in earnings a year ago.
Tui declared no dividend, having distributed EUR0.54 a share a year prior.
The company said that the first half of the financial year opened with record bookings in January, a strong outlook, and increased capacity planned for summer. However, the Covid-19 pandemic led to the suspension of operations in March, scuppering most of the company's financial second half.
Tui said significant self-help actions were taken to address the impact of the Covid-19 pandemic, with cash fixed costs reduced by more than 70% during the immediate lockdown period and substantial reduction in cash capital expenditure. It said it has permanently reduced costs, targetting EUR300 million to EUR400 million per year in savings.
Tui highlighted that was the first tour operator to restart across multiple markets and destinations as travel restrictions eased worldwide from mid-June, "demonstrating the advantage of its integrated and diversified business model".
Full-year customer volume of 8.1 million was down 62% on the prior year, as direct result of imposed travel restrictions. Since restart of operations in mid-June, more than 2 million customers have taken holidays with Tui, it said.
Going forward, the company said it currently expects to operate an adjusted capacity of 20% for winter 2021 which will be weighted towards our financial second quarter. Tui also said it continues to expect to operate an adjusted capacity of 80% for summer 2021, which will be flexed as the company gains more visibility on future imposed travel restrictions.
Tui expects to return to profitable growth in financial 2022, after a transition year in financial 2021.
After recent cash injections and loan agreements, Tui said it had EUR2.5 billion in cash and debt facilities as of November 30, taking into account an expected senior loan note redemption of EUR300 million.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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