(Sharecast News) – Leisure travel conglomerate TUI announced a robust return to profitability in its third quarter report on Wednesday, with underlying EBIT improving by almost €197m year-on-year to reach €169.4m.
The FTSE 250 company said that positive trajectory had solidified its expectations for a fruitful summer season, as it remained on track to meet or exceed projections for the 2023 fiscal year.
One of the standout metrics was its increased number of customers, jumping by 9% to 5.5 million in the recent quarter.
That figure was closing in on the third quarter of 2019 levels, achieving 95% of the pre-pandemic number on a like-for-like basis.
A resultant average load factor of 93% for the quarter further underlined the company’s success in adapting to the post-Covid environment.
Financially, TUI’s revenue surged 19% year-on-year to €5.3bn, which was also 11% above the pre-pandemic levels observed in the same period in 2019.
The board put that growth down to higher customer volumes and an increase in pricing.
A number of TUI’s segments showed promising progress, with the hotels and resorts division performing consistently well, marking its fifth quarter where it outperformed 2019 numbers, backed by enhanced operational performances across key brands.
The cruises segment was meanwhile steadily recuperating, marking its fifth profitable quarter since the pandemic’s onset.
All three of TUI’s cruise brands positively contributed to the EBIT development, thanks to higher volumes and occupancies.
Markets and airlines also reportedly saw a commendable improvement, driven largely by higher prices and robust demand.
In addition to its operational achievements, TUI said it had taken strategic steps to bolster its financial position.
Following the €1.8bn capital raise in April, the firm extended its existing syndicated credit lines to a total of €2.7bn in May.
That, the board noted, had been accompanied by an improvement in its credit rating during the quarter.
However, recent wildfires in Southern Europe, especially those affecting Rhodes, posed challenges, impacting short-term bookings.
Despite the setbacks, TUI said it managed to navigate the situation, ensuring the safety of its guests and staff, successfully repatriating 8,000 customers.
With 86% of its summer offerings already sold, matching the levels seen in 2022 and 2019, TUI said it remained confident in meeting its summer 2023 capacity predictions, which were anticipated to parallel the pre-pandemic levels seen in the summer of 2019.
The company reconfirmed its goal to significantly boost its underlying EBIT for the 2023 financial year.
Reporting by Josh White for Sharecast.com.