The Russian oligarch is threatened with a massive dilution of his shares.
(Photo: IMAGO/ITAR-TASS)
Frankfurt The Tui tourism group is benefiting from the continuing desire to travel and has made an operating profit for the first time since the beginning of the corona crisis. The operating result before interest and taxes (EBIT) improved from minus two billion to plus 320 million euros, as the company announced on Wednesday.
The bottom line is that the company ended the 2022 financial year, which lasted until the end of September, with a slight loss of 212 million euros. A year earlier, however, it was still almost 2.5 billion euros. At €16.55 billion, sales were almost four times higher than in the previous year, when travel restrictions during the pandemic hampered the package tour and cruise business.
The good business development is reflected in the company’s balance sheet, which had suffered badly from the consequences of the pandemic. Tui was able to reduce net debt from almost five billion to 3.4 billion euros.
Tui wants to finally replace state aid
There has also been progress on the equity side. It is positive again in the group with around 646 million euros. At 4.2 percent, the equity ratio is still too low. But a year earlier, Tui had reported negative equity of 418 million euros at group level. In Tui AG, on the other hand, the equity ratio is a good 40 percent – a solid figure.
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In the expectation of continued good booking numbers, the Tui leadership around CEO Sebastian Ebel now wants to finally replace state aid. Management has agreed on this with the Economic Stabilization Fund (WSF). In the course of 2023, Tui wants to replace the remaining silent participation by the federal government and a bond with warrants and also buy the right to conversion into Tui shares from the state corona rescue fund. The loans from the state bank KfW are also to be significantly reduced from the last 2.1 billion euros.
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The company calculates costs of at least 730 million euros for this. The money is to be raised through a capital increase. Tui has already repaid state aid and got fresh capital three times. However, this has diluted the share price so much that a new capital increase is no longer so easy. Because new shares must have at least the calculated nominal value of one euro.
Therefore, the share capital must first be reduced to one tenth. Ten Tui shares become just one. The Annual General Meeting is to decide on this step next February.
This would have massive consequences for the Russian major shareholder Alexei Mordashov. His shareholding would shrink from 30.91 percent to 3.091 percent. The Russian oligarch has no access to his Tui papers because of the sanctions, so he could not participate in the capital increase either.
For the 2023 financial year, which has been running since October, the group expects a strong increase in sales and a significantly higher operating profit.
(Photo: IMAGO/NurPhoto)
Mordashov had moved most of his shares to a company called Ondero Limited in the spring in order to avoid sanctions against Russia. But behind Ondero stands Marina Mordashova, his wife, who is also sanctioned.
Because the Federal Ministry of Economics has been reviewing the process since March, the transaction has not yet become effective. Mordashov holds a further 3.75 percent in Tui through Servergroup LLC.
Tui reports great demand for the winter program
In operational terms, the seasonally strongest final quarter from July to September saved the group’s balance sheet with a pre-tax profit of around one billion euros. At 7.6 million, the number of guests reached 93 percent of the pre-crisis level of 2019.
“Tourism remains a long-term and attractive growth sector,” explained Tui boss Ebel. The formula for profitable growth for the world’s largest travel group is: “New products, additional customers, more market share”.
“We also expect a solid and good year 2023, but we are very aware of the external market factors,” added Ebel. Tui takes into account the effects of the Ukraine war and corona pandemic, inflation and high energy prices as well as exchange rate fluctuations in the outlook.
In the winter of 2022/23, a program is planned at about the pre-crisis level. With 2.7 million bookings, a good half has already been sold. As before, vacationers booked at short notice. For the 2023 financial year, which has been running since October, the group expects a strong increase in sales and a significantly higher operating profit.
More: Tui reports strong travel demand – More and more holidaymakers are booking all-inclusive.