German travel and tourism giant Tui AG yesterday confirmed its outlook for the year after posting a net profit during its third quarter.
The group reported a profit of €15.3 million in the three months to June against a net loss of €3.3 million in the same period last year, thanks to better business and the absence of one-off charges at its Tui Travel unit.
Underlying operating profit for the financial year to date improved by 6% year on year.
The group described the positive development as "driven both by Tui Travel and Tui Hotels and Resorts".
However, the underlying third-quarter profit sank 15.4% to €86.5 million.
Tui AG holds a majority stake in Tui Travel. Group chief executive Friedrich Joussen said: "The current financial year is a year of transition on our path towards resuming dividend payments."
He cited changes under the company's ‘oneTUI’ strategy plan which includes restructuring of underperforming business units and cuts in administrative staff and interest payments.
The group announced the sale of two hotels and a company jet and the termination of sponsorship agreements.
However, the number of job cuts planned by summer 2014 has been reduced from about 200 to 90 following negotiations with employee representatives.
Joussen said: "We are well on track and confident of achieving the financial targets of oneTUI."
The group said it was sticking to its forecast of a rise in its adjusted operating profit (Ebitda) and a moderate increase in sales.
Operating profit during the 2014-15 financial year is forecast to reach €1 billion.
Almost half of the cash contributions to Tui AG will be generated by hotel and cruise activities in the future, the group said.
UK-based Tui Travel reported an improved third quarter operating profit of £87 million on Wednesday.
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