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TUI shares fall despite profit beat, resumed dividend payments
(Sharecast News) - Shares in TUI fell on Tuesday after the German holiday travel giant posted higher first-quarter earnings and resumed dividend payments as it but also reported lower passenger numbers. The company said that a dividend of 10 European cents per share will be approved at its annual general meeting later Tuesday after a break, due to a positive performance last year.
Operating profits for the three months to December 31 rose to € 77.1m, up from €51m a year earlier, driven by a strong performance in its holiday experiences business as well as its markets and airline unit. Analysts had forecast €66.7m.
TUI reported 7.1 million customers in the first quarter, up 2.2% against last year, but air passenger numbers were down 2% to 3.7 million. Revenue stood rose 1.3% to €4.9bn.
Winter and summer booked revenue were down 1% and 2% respectively, the company added as it reiterated 2026 guidance of 2% - 4% revenue growth and underlying operating profit growth of 7% - 10%.
"Across our markets, demand for short- and medium-haul destinations remains the primary driver of volumes, with the Canaries, Egypt, Mainland Spain and Cape Verde proving most popular among customers," the company said.
"For long-haul destinations, Thailand has reported the strongest growth, with Mexico and the Dominican Republic once again being key destinations." Travellers have started shunning the US after President Donald Trump's widespread campaign against immigrants, with several examples of tourists being detained at the border.
A dividend of 10 euro cents a share will be approved at TUI's annual general meeting later on Tuesday, the company said, adding that from fiscal 2026 it would target a payout ratio of 10-20% of underlying earnings per share "balancing shareholder returns with maintaining operational flexibility for disciplined growth investment and continued deleveraging".
Hargreaves Lansdown analyst Aarin Chiekrie said: "As long as macroeconomic conditions don't deteriorate, TUI looks to be on the right flight path to grow underlying operating profits by between 7-10% this year, in line with guidance."
Reporting by Frank Prenesti for Sharecast.com
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