TUI share price slides as group posts quarterly loss

Shares in TUI Group (LON:TUI) have fallen into the red in London this morning, as the blue-chip group posted a loss for the first quarter of its financial year. The update came after the company trimmed its  earnings forecasts last week, attributing the move to last year’s heat wave as well as the continued sterling weakness.

As of 08:28 GMT, TUI’s share price had given up 5.07 percent to 909.60p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.55 percent higher at 7,168.09 points. The group’s shares have lost more than 41 percent of their value over the past year, as compared with about a 0.2-percent drop in the Footsie.

TUI posts Q1 results

TUI announced in a statement this morning that its net loss had widened to €111.9 million in the quarter ended December 31, 2018, from €68.3 million in the prior-year period. The group’s turnover, however, climbed 4.7 percent to €3.7 billion, while underlying EBITDA slumped 53.4 percent to €26.8 million.

Reuters quoted the tour operator’s Chief Executive Fritz Joussen as commenting that the group was taking a hit on margins to protect its market share in a tough operating environment for travel firms.

“Customers are buying, but they are buying at lower prices. That’s the reason why you see the margin degradation. It is all markets,” Joussen told reporters, as quoted by the newswire. “The market is challenging.”

Analysts on group

Barclays downgraded its rating on TUI to ‘equal weight’ last week, while UBS reaffirmed the company as a sell. According to MarketBeat, the blue-chip tour operator currently has a consensus ‘hold’ rating and an average price target of 1,600.83p.