German travel giant TUI reports switch to profit

German travel and tourism giant TUI on Thursday confirmed its outlook for the year after posting a net profit during its third quarter. From April to June, the group reported a net profit of 15.3 million euros ($20.4 million). That compared to a net loss of 3.3 million euros last year thanks to better business and the absence of one-off charges at its TUI Travel unit. The report surprised analysts polled by Dow Jones Newswires, who had expected a net third-quarter loss of 13 million euros. TUI operates its business year from October to September. However earnings before interest, taxes, depreciation and amortisation (Ebitda) sank 15.4 percent to 86.5 million euros and turnover slipped one percent to 4.7 billion euros. It blamed weak performance by TUI Travel and TUI Hotels & Resorts in particular, which reported a 22.4-percent fall in sales to 70.3 million euros. "The current financial year is a year of transition on our path towards resuming dividend payments," chief executive Friedrich Joussen said in a statement, citing changes made under the company's one TUI strategy plan. "We are well on track and very confident of achieving the communicated financial targets of oneTUI." The group said it was sticking by its forecast of a rise in its adjusted Ebitda and a moderate increase in sales. Operating profit during the 2014-2015 business year is forecast to reach one billion euros. On Wednesday Britain-based TUI Travel, Europe's biggest tour operator, reported that net losses fell 17 percent in the first nine months of its financial year but the group remained weighed down by weak sales in France. After-tax losses stood at £236 million ($362 million, 272 million euros) in the nine months to the end of June compared with the equivalent period in 2011/12. TUI Travel was created in 2007 from the merger of British travel group First Choice and the tourism activities of Germany's TUI.