By Scott Kanowsky
Investing.com -- TUI AG NA (ETR:TUIGn) reported first-quarter top-line growth that beat analysts' expectations, while bookings showed "encouraging momentum," as a post-pandemic recovery in customer demand remained resilient despite cost-of-living pressures.
Revenue increased by 58% during the three months ended on December 31 to €3.8 billion (€1 = $1.0757), topping Bloomberg consensus estimates of €3.29B. The figure was also slightly above the €3.7B registered in the same period of 2019, which TUI said reflected "a return to a restriction free travel environment."
But Europe's biggest tour operator still posted a quarterly underlying loss before interest and taxes of €153M, worse than forecasts of €129M, although this was a 44.1% improvement year-on-year.
TUI's new chief executive Sebastian Ebel previously said in December that the group had surpassed an "existential crisis" caused by COVID-19 travel bans, but admitted that it must still cut back on debt and strengthen its balance sheet due to the crisis. The company is also aiming to line up capital to pay back a €730M state aid package from the German government.
However, TUI re-confirmed its guidance to increase underlying income "significantly" in its current fiscal year thanks to "record booking days" online in both the U.K. and Germany to start 2023, in a sign that travelers are shrugging off recent hikes in ticket and holiday package prices to spend on upcoming getaways. A total of 8.7 million bookings have been taken across both the winter and summer seasons, the firm said.
"Volumes overall in the last four weeks are now above pre-pandemic levels at +5% for Winter 2022/23 and +10% for Summer 2023, with higher prices, underlining the popularity of our product offering and a testament to the importance of travel for our customers," the group added in a statement.
Analysts at Bernstein said the bookings performance points to a "bright summer" for TUI, even though levels for the season are still 11% under pre-COVID numbers.
Shares in TUI rose in early European trading on Tuesday.