Global issues impact Kuoni’s first half results
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Geopolitical events and weaker currencies have impacted Kuoni Group’s first half results, issued earlier today.
The travel group has seen a 6.1% dip in turnover to CHF2.47 billion (US2.7bn, GBP1.6bn)for the first six months of the year, while gross profit was 9% down to CHF444.2m.
Operating earnings (EBIT) improved 5% but still came in at a loss of CHF17.1m.
The group’s CEO Peter Meier blamed several global issues for the dent in numbers, including protests in Egypt, Thailand and Ukraine as well as currency trends in Asia, Russia and Scandinavia.
“With all the negative geopolitical developments in Egypt, Kenya, Thailand, and the Ukraine, the operating environment has been challenging. We expect it to remain so for the rest of this year. Currency trends in Japan, India, Indonesia, Australia, Russia and Scandinavia had a negative effect on consumer sentiment,” he explained.
He continued: “In Scandinavia price and margin erosion prevented an increase in operating earnings in the first half of 2014. The measures we introduced will start to take effect only towards the end of the year. The FIT business reported strong organic growth in online hotel bookings in Asian source markets. Visa services provider VFS Global continues to perform well, with a significant rise in earnings.”
Current trading showed group travel sales are down 10% as of 17 August, while services under FIT are up 2%, driven by growth in Asia, Germany, the UK and Middle East/Africa. Its outbound Nordic business has suffered the most with a 14% slump, compared to a 2% decrease in Europe/Asia and an 11% decline for the destination management specialists.
For 2014 the group expects EBIT of CHF85-95 million, with Meier saying the group’s financial goals for 2016 remain the same.
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