TUI Group sees £31 mln hit from unrest in Egypt/Tunisa

Europe's leading travel group sees a giant cut in profits over political turmoil in Egypt and Tunisia

TUI AG expects to post a full-year profit by offering more holidays elsewhere to offset the impact of unrest in Egypt and Tunisia that could wipe up to 37 million euros (31.4 million pounds) off quarterly earnings.
"What we can see from our bookings is that we are still well on track, so obviously people are using the opportunity to rebook," TUI AG's Chief Financial Officer Horst Baier said on a conference call.
"I do not see a negative impact on the overall booking trend."
Travel companies such as TUI -- owner of Europe's biggest tour operator TUI Travel (TT.L) -- and Thomas Cook (TCG.L) have cancelled holidays from some countries to Egypt after mass protests in major cities including Cairo and Alexandria.
TUI's German tourism arm said on Tuesday it had cancelled all trips to Egypt and Tunisia through the end of February and was offering customers free rebookings, which it hopes will avert a slump in demand.
Baier's optimism echoed comments by Thomas Cook, which said this week it hoped to offset a hit of up to 20 million pounds by offering more holidays to other destinations such as Greece and Spain.
About 12.5 million tourists visited Egypt in 2009, bringing revenue of $10.8 billion, and other countries are now set to pick up some of the slack.
A senior tourism industry official told Reuters this week Greece could see double-digit growth in visitor arrivals this year.
Spain is also likely to pick up more business as tour operators rush to offer alternatives for customers seeking winter sun.
"We hope to see a stabilisation in North Africa over the coming months," TUI's Baier said.
NO MASSIVE IMPACT
TUI said it still sees a slight increase in full fiscal-year operating profit and expects to post a net profit for the year.
Analysts on average expect TUI to report a net profit of 204 million euros for the twelve months through the end of September and a 0.04 euro per share dividend, according to Thomson Reuters I/B/E/S.
"We do not expect a massive negative impact from this unrest for TUI in 2011, even though (it) ... might turn to some extra costs in the second quarter," Sylvia Quandt Research analyst Stefan Kick said, affirming his "buy" recommendation on TUI's stock.
Shares of TUI were up 1.5 percent at 10.60 euros by 9:09 a.m., while the German mid-cap index .MDAXI was up 0.2 percent.
The shares have gained 57 percent over the past year on hopes TUI will raise cash by floating part of container shipping unit Hapag-Lloyd. Baier said on Wednesday he would not rule out a possible initial public offering before the European summer.
TUI AG reported an underlying loss before interest, tax and amortisation (EBITA) of 119.6 million euros for the three months to the end of December, bang in line with the average estimate in a Reuters poll of banks and brokerages.
Tour operators usually make a loss in this traditionally quiet quarter.