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EBITA growth outpaced revenue increase in TUI’s cruise operations 2017-18

Operating result (EBITA) of the cruise operations of TUI AG, the German travel company, increased by two and a half times as fast as revenues in the financial year to 30 September, the company said.

 Revenues grew by 10.7% to €901.9 million, but EBITA increased by 26.8% to €324.0 million, TUI said in uts 2018 annual report. The group operates total a fleet of 16 ships under three brands.

TUI Cruises, a joint venture with Royal Caribbean Cruises Ltd (RCCL), benefitted from the first Winter 2017 -18 of operations for Mein Schiff  6 and launched Mein Schiff 1 in May 2018. The fleet also benefitted from fewer dry dock days in FY 2018.

“Average daily rate increased versus prior year, driven by the sustained growth in demand for cruise in Germany, which remains a market with relatively low rates of cruise penetration, and in particular high demand for German language, premium all-inclusive product,’ TUI said.

Marella Cruises in the UK delivered the first Winter of operations for the Marella Discovery 2 and launched Marella Explorer in May. The older style Marella Majesty exited the  fleet in October 2017. “Average daily rate increased versus prior year, as we continue to deliver our modernisation programme and expansion in line with the UK cruise market,” the company stated.

The luxury and expedition market unit Hapag-Lloyd Cruises delivered a strong performance and an increase in earnings, with increased occupancy and average daily rate and a good operational performance offsetting the higher number of dry dock days.

In the financial year 2019, TUI  will launch three ships forits cruise brands. “Bookings for the new ships and the existing  eet continue to perform well. Overall, we therefore expect this segment to deliver growth in underlying EBITA of more than 10% in FY 2019,” the company noted.

In the light of investment decisions already taken and projects in the pipeline, we expect TUI Group’s net capex and financial investments to total around € 1.0 billion to1.2 billion in the financial 2019.

“This includes expected down payments on aircraft orders (excluding aircraft assets financed by debt or finance leases) and proceeds from the sale of  fixed assets. Capex mainly relates to the launch of new production and booking systems for our markets, maintenance and expansion of our hotel portfolio and the acquisition of two cruise ships, TUI concluded.

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