FRANKFURT (Reuters) - Tour operator TUI AG slashed its earnings guidance for its fiscal full year as last summer’s hot weather put holiday makers off booking trips and as the weak pound weighed on the purchasing power of its British customers.
TUI late on Wednesday said it now expected underlying earnings before interest, taxes and amortisation (EBITA) for the fiscal year ending Sept. 30 to be broadly flat from the 1.177 billion euros (£1.030 billion) it made in the 2018 fiscal year.
The company added it could no longer uphold its previous guidance for at least 10 percent annual growth in underlying EBITA at constant currencies during the three years to fiscal year 2020.
TUI said it had seen “the extraordinary hot weather in 2018 resulting in later bookings”. It also cited “continued weakness of the Pound Sterling, making it difficult to improve margins on holidays sold to UK customers”.
A shift in demand from the western to eastern Europe created overcapacities in certain destinations such as Spain’s Canary Islands, it added.
Reporting by Ludwig Burger; Editing by Tom Brown