Travel-and-tourism giant Tui reported a €1.5 billion ($1.8 billion) loss in the six months to the end of March, as the continuation of travel restrictions due to the COVID-19 pandemic left airplanes on the ground and hotel rooms empty.
Shares in the German group, which operates hotels, airlines, cruise ships, travel agents, and is a constituent of London’s midcap FTSE 250
index, fell 3%.
posted revenue of €716 million in the first half of its fiscal year, a 89% decline from the same period in the year prior. Tui’s liquidity as of May 7 was €1.7 billion, down from a €2.1 billion cash pile as of the beginning of February. Many travel and tourism companies have burned cash since the COVID-19 pandemic all but halted global travel more than a year ago.
The group was optimistic about the summer travel season, even as summer bookings remain at 69% of 2019 levels. Tui said 2.6 million customers were currently booked for summer 2021, a slight decline from levels reported in March, due to travel restrictions. Tui said it expects to be profitable again by September.
Also read: European stocks rebound from worst day in 2021, as U.S. futures remain negative
“The flight paths out of the crisis have begun to be mapped out for the world’s largest travel and tourism operator but the damage caused by the harsh rays of COVID run deep,” said Susannah Streeter, an analyst at Hargreaves Lansdown.
While Tui shares slipped in London, the FTSE 100
— the index of the top U.K. stocks by market capitalization — climbed 0.7% higher, outpacing other major European indexes as equities across the continent rebounded. The FTSE 100 fell more than 175 points on Tuesday, the largest one-day point decline since September 2020.
Analysts pointed to better-than-expected economic data as a force behind the acceleration among U.K. stocks. The U.K. economy expanded by 2.1% in March, outpacing analysts’ expectations of 1.5% growth and confirming the pathway to a strong rebound after the recession caused by COVID-19.
Plus: Strong growth in March shows U.K. economy headed for swift recovery
“The FTSE is outperforming its European peers as GDP [gross domestic product] data points to an economic turnaround,” said Sophie Griffiths, an analyst at Oanda. “Delving deeper into the numbers, the monthly GDP for March showed a stronger-than-expected rebound in the economy as businesses prepared for the easing of lockdown restrictions and the opening of the economy.”
Shares in Diageo
one of the world’s largest distillers and owner of brands including Johnnie Walker, Smirnoff, Captain Morgan, and Guinness, jumped 3.5%. The company said it expects profit growth of at least 14% this fiscal year to outpace sales growth.
Shares in Compass
the world’s largest catering group, which counts technology giant Google
and the U.S. military among its clients, fell 1.5%. The group reported profits of £168 million in the six months to the end of March, a decline of more than 78% from the same period in the year prior.
stock fell near 4%, after the bookmaker and gambling giant delayed its plans to float FanDuel in the U.S. and announced that its chief executive of four years would step down.
Shares in Just Eat Takeaway
were the biggest faller on the FTSE 100, declining 5%. One of the food-delivery group’s rivals, Delivery Hero, announced on Wednesday that it would re-enter its competitive home market of Germany in June. Delivery Hero sold its German operations to Just Eat Takeaway two years ago.
Read: Watch out Uber and Just Eat, Delivery Hero has its sights on the lucrative German market