TUI optimistic forecasts
2022.12.14 04:03
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TUI optimistic forecasts
Budrigannews.com – After a strong summer helped it swing back into profit and it forecast a “solid” 2023, TUI, the largest holiday company in the world, stated that it planned to repay support for COVID-19 through a capital raise the following year.
TUI, with headquarters in Germany, stated that it would begin to reduce its reliance on the German government, which had assisted the company in surviving the pandemic until travel was discontinued.
The chief financial officer estimated that the company would fund the repayments with a capital increase of 1.6 billion to 1.8 billion euros next year.
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In the initial transactions, TUI shares, which have lost 40% of their value thus far this year, decreased by 4% to 141 pence.
In a note, Peel Hunt analysts stated, “We believe it will be difficult for the share price to make progress prior to this (rights issue).”
Between 730 and 957 million euros will be repaid to Germany’s Economic Stabilization Fund (WSF) by TUI through the capital increase.
It will get the rights to its shares back in exchange. In addition, it intends to reduce its KfW development bank credit lines. TUI, which operates cruise ships, holidays, hotels, and an airline, reported underlying earnings (EBIT) of 409 million euros (or $435 million) for the year that ended in September, as opposed to a loss of 2 billion euros the year before.
TUI predicted significant earnings growth for 2023, albeit cautiously given the economic outlook.
It stated that this winter’s average holiday prices were 28% higher than they were before the pandemic, which would mitigate inflation.
New CEO Sebastian Ebel, a former CFO who has been in charge for two months, stated, “We expect 2023 to be a solid and good year, but we are very aware of external market factors.”
