* FY net loss 9 mln euros after costs of village closures
* Op pft from holiday villages down 11 pct to 55 mln euros
* Revenue down 1.3 percent at 1.4 billion
* Sees 3 pct decline in Europe-Africa Summer 2014 capacity
* Says cannot discuss Fosan/Ardian bid
By Dominique Vidalon
PARIS, Dec 6 (Reuters) - French holiday operator Club Med vowed on Friday to accelerate its expansion in emerging markets such as China, Brazil and Russia to counter persistent weakness in Europe.
Club Med, which is the target of a bid by China’s Fosun International and French private equity firm Ardian, predicted a 3 percent drop in the number of holidaymakers it can accommodate at its villages in Europe in summer 2014, whereas there would be a sharp rise in Asia.
The company, whose appeal rests on all-inclusive accommodation featuring childrens’ clubs, abundant food buffets and sporting activities, said it had fallen to a full-year net loss of 9 million euros after one-off costs from the exit or temporary closure of villages including Hammanet in Tunisia.
That compares with a net profit of 2 million a year before.
The group also said earnings in the year through October had been hit by political unrest in Egypt and Tunisia, along with weaker demand in Europe due to tough economic conditions.
“The economic climate in Europe remains uncertain and that is why we are taking a cautious position on capacity in Europe,” Chief Executive Henri Giscard d‘Estaing told a news conference.
“I am convinced that the best answer to the crisis is to accelerate our expansion in fast-growing emerging markets with our more upscale offer,” he added.
Club Med, which traces its origins to the opening in 1950 of its first club on the Spanish island of Mallorca, has struggled in the past decade because of stiff competition and an unsuccessful expansion into services. A more recent drive upmarket has been hampered by Europe’s economic downturn.
It now aims to make China its second-largest market by customer numbers by end-2015 and plans to open a third village in the country next year on Dong‘ao Island, in the South China Sea off Macau and Hong Kong.
Europe and Africa accounted for 71 percent of revenue in 2013.
Beyond China, Club Med is speeding up expansion in Russia and Brazil, with the goal of lifting the contribution of emerging markets to its global customer base to 33 percent by 2015 from 29 percent in 2013.
With a stock market value of 551 million euros, the group competes with global hoteliers such as Intercontinental and Accor. It also vies with tour operators such as global leader TUI Travel and Thomas Cook.
Operating profit at the company’s holiday villages fell 11 percent to 55 million euros in its fiscal year ended Oct. 31 on revenue down 1.3 percent at 1.4 billion.
The Europe-Africa region recorded a 3.7 percent decline in revenue, primarily due to a 5.2 percent drop in France.
By contrast, revenue grew 5.2 percent in the Americas, driven by the United States and Brazil, while sales rose 5.3 percent in Asia, benefiting from a 34 percent rise in the number of Chinese customers, thanks to the opening of the Guilin village.
Club Med said winter bookings in the eight weeks to Nov. 30 were down 1.7 percent in Europe-Africa but up 6.4 percent in Asia.
The bid for Club Med opened on July 17 and was due to run until Aug. 30, but was extended until further notice after shareholders issued a legal challenge.
A French court has scheduled a hearing on the challenge for Feb. 27 and Club Med officials said on Friday they could not discuss the bid at the news conference.
Minority shareholders’ association ADAM and Charity Investment Asset Management (CIAM) say that, at 17.50 euros per share, the takeover price is too low, though Club Med’s management has recommended acceptance.
By 1031 GMT, Club Med shares were down 0.5 percent at 17.33 euros.