TUI FY 2022 Revenue, Underlying Earnings Beat Market Estimates — Earnings Review

UNDERLYING EBIT: Underlying earnings before interest and taxes–one of the company’s preferred metrics which strips out exceptional and other one-off items–came in at EUR408.7 million, compared with a EUR2.08 billion loss a year before. This compares with four analysts’ expectations of around EUR388.0 million in underlying EBIT, according to FactSet.

PRETAX LOSS: The company’s pretax loss for the period came in at EUR145.9 million, significantly narrowing from a prior-year loss of GBP2.46 billion, but missing a consensus loss of EUR124.9 million, taken from FactSet and based on nine analysts’ forecasts.

WHAT WE WATCHED:

–BOOKINGS: The tour operator said winter bookings are around 84% of prepandemic levels, with 2.7 million for the season so far, though there was a continued trend towards short-term bookings.

–AVERAGE PRICES: TUI said its average selling price was 28% higher compared with winter in 2018-19 and 7% higher than winter 2021-22, which will help soften the effects of the high inflationary environment.

Pricing will be a key test in 2023 as affordability for holidaymakers becomes an issue, and given people have shifted to booking holidays at shorter notice to avoid the risk of being caught off guard by disruption, the company has limited visibility on its future business, AJ Bell investment director Russ Mould said in a market comment.

–RIGHTS ISSUE: The travel operator said late Tuesday that it is planning a future rights issue to provide funds to repay Covid-19 support to the German government. Repayment will cost EUR730 million in total, but potentially up to EUR957 million, and the issue could target around EUR1.4 billion, Peel Hunt said in a research note, adding that uncertainty around this issue will likely weigh on shares.

Write to Joe Hoppe at joseph.hoppe@wsj.com