Tui Results Positive: Encouraging For Budget Airline Operators

Tui (TUI1 GY), which is set to vote on delisting from the LSE today, reported 1Q24 (3M to Dec-23) figures which beat consensus and gave good outlook statements. Tui is not a material credit name but the lateral to the budget airlines and other travel operators is positive.

• Revenues were +15% y/y and 3% ahead of consensus and underlying EBIT was (marginally) positive, against an expectation of EUR113m loss, a reflection of the usual seasonality in the travel business. Guidance on underlying EBIT is restated for FY24, 10% revenue growth is seen, and customer numbers look above expectations .
• Net debt is down to EUR4bn (from 5.3bn at same point last year) and mgmt noted the rating upgrade on 8-Feb-24 (S&P to B+ Pos). Mgmt’s “mid-term” targets are restated: net debt/underlying EBITDA <1.0x and a further notch rating upgrade (back to pre-pandemic levels).
• Tui is to vote at today’s AGM (1000 London) on delisting from London but unlikely to be credit material event. The company only has one traded bond out there (TUIGR 5 04/16/28) but this is more about the positive indication for the wider travel and airline sectors (EasyJet, Ryanair).

Analysts’ meeting is 0800 London time, at: https://webcast.meetyoo.de/index.html?e=Ff0T3wSlmzsU