TUI AG, the German owner of Europe's largest travel company, reported a 42 per cent drop in third-quarter profit after paying a larger share of income to minority investors and spending money to combine tourism brands.
Net income attributable to TUI stockholders dropped to 256.1 million euros (S$493.1 million), or 88 cents a share, from 462 million euros, or 1.50 euros, a year earlier, the Hanover, Germany-based company said on Friday.
Sales rose 16 per cent to 8.54 billion euros. TUI maintained annual forecasts.
Profit would have slipped just 2.9 per cent without the higher payment to investors who control 49 per cent of TUI Travel plc, the tourism unit created by a merger in September of last year. TUI, owner of the Thomson travel brand, plans to expand the division with the proceeds from last month's sale of control of its Hapag-Lloyd shipping unit.
'This effect hadn't existed one year earlier,' TUI spokesman Robin Zimmermann said. 'It wasn't as strong in the last quarters, as the tourism business makes most of the profit in the third quarter.'
Earnings at the travel unit fell 3.4 per cent from a year earlier to 616 million euros before interest, taxes and amortisation. Shipping profit dropped 31 per cent to 66 million euros on the same basis.
'The reported figures have a limited significance,' Martina Noss, an analyst at Norddeutsche Landesbank in Hanover, said.
'There are a lot of adjustments and one-time effects,' added Ms Noss, who has a 'hold' rating on the stock.
TUI fell 33 cents, or 3.7 per cent, to 8.44 euros on Friday in Frankfurt trading. The stock has dropped 56 per cent this year, more than competitor Thomas Cook Group plc, which like TUI Travel was formed last year by a merger.
Net income would have totalled 448 million euros without the larger payment to the travel company's minority owners.
Net debt fell to 2.8 billion euros as of Sept 30 from three billion euros a year earlier. It probably will reach 3.9 billion euros by the year's end, the same as at 2007's close, and then fall to 600 million euros after the Hapag sale closes, likely in January, CFO Rainer Feuerhake said.
Hapag-Lloyd's revenue rose 6.9 per cent to 1.67 billion euros. TUI has agreed to sell the unit and then repurchase a 33 per cent stake, valuing the shipper at 4.45 billion euros.
Net income attributable to TUI stockholders dropped to 256.1 million euros (S$493.1 million), or 88 cents a share, from 462 million euros, or 1.50 euros, a year earlier, the Hanover, Germany-based company said on Friday.
Sales rose 16 per cent to 8.54 billion euros. TUI maintained annual forecasts.
Profit would have slipped just 2.9 per cent without the higher payment to investors who control 49 per cent of TUI Travel plc, the tourism unit created by a merger in September of last year. TUI, owner of the Thomson travel brand, plans to expand the division with the proceeds from last month's sale of control of its Hapag-Lloyd shipping unit.
'This effect hadn't existed one year earlier,' TUI spokesman Robin Zimmermann said. 'It wasn't as strong in the last quarters, as the tourism business makes most of the profit in the third quarter.'
Earnings at the travel unit fell 3.4 per cent from a year earlier to 616 million euros before interest, taxes and amortisation. Shipping profit dropped 31 per cent to 66 million euros on the same basis.
'The reported figures have a limited significance,' Martina Noss, an analyst at Norddeutsche Landesbank in Hanover, said.
'There are a lot of adjustments and one-time effects,' added Ms Noss, who has a 'hold' rating on the stock.
TUI fell 33 cents, or 3.7 per cent, to 8.44 euros on Friday in Frankfurt trading. The stock has dropped 56 per cent this year, more than competitor Thomas Cook Group plc, which like TUI Travel was formed last year by a merger.
Net income would have totalled 448 million euros without the larger payment to the travel company's minority owners.
Net debt fell to 2.8 billion euros as of Sept 30 from three billion euros a year earlier. It probably will reach 3.9 billion euros by the year's end, the same as at 2007's close, and then fall to 600 million euros after the Hapag sale closes, likely in January, CFO Rainer Feuerhake said.
Hapag-Lloyd's revenue rose 6.9 per cent to 1.67 billion euros. TUI has agreed to sell the unit and then repurchase a 33 per cent stake, valuing the shipper at 4.45 billion euros.