Consolidated Earnings

The consolidated profit and loss statement of the Continuing Operations reflects the seasonality in tourism, with positive earnings primarily generated in the second and third calendar quarter for seasonal reasons. Earnings by Continuing Operations showed a gratifying year-on-year development. For the first half of the year, by contrast, the performance was mainly characterised by the recession-driven weakness of the tourism business in the first quarter of 2009/10.

Turnover and cost of sales    
Turnover comprised the turnover of the Continuing Operations, i.e. Tourism and Central Operations. In the second quarter of 2009/10, turnover declined by 7% year-on-year to €2.9bn. In the first half of 2009/10, the year-on-year decline was 11%. It was primarily attributable to lower business volumes in TUI Travel. Turnover was presented alongside the cost of sales, which decreased in line with the declining business volume and as a result of further cost reductions in the framework of the integration of business activities. A detailed breakdown of turn­over and the development of turnover is presented in the section ‘Consolidated turnover and earnings’.

Gross profit   
At €59m, gross profit as the balance of turnover and the cost of sales rose ­con­siderably in the second quarter of 2009/10, with a year-on-year increase of €134m. For the first half of the year, gross profit amounted to €205m, up €33m year-on-year.

Administrative expenses   
Administrative expenses comprised expenses no directly allocable to the turnover transactions, such as expenses for general management functions. At €329m, they were up €44m year-on-year in the second quarter. This increase was mainly driven by the year-on-year strengthening of Sterling against the Euro. For the first half of the year, the corresponding expenses totalled €641m, almost matching the previous year’s level.

Other income/Other expenses
Other income and Other expenses primarily comprised profits and losses from the sale of fixed assets. The balance of income and expenses totalled €9m in the second quarter of 2009/10, a year-on-year increase of €2m, whereas a year-on-year decline of €15m was recorded for the first half of 2009/10. This decrease was caused by the results from the settlement of derivative financial instruments, carried in the prior year periods in connection with the strategic realignment of airline activities in TUI Travel effected in 2008.

Impairment of goodwill
No goodwill impairment charges were carried for the second quarter or first half of 2009/10. In the previous year, impairments of goodwill were effected in the hotel sector for the first half of the year.

Financial result   
The financial result comprised the interest result and the net result from market­able securities. At €-58m, it improved by €3m year-on-year in the second quarter of 2009/10 and comprised financial income of €47m, up €7m, and financial ex­penses of €104m, up €4m. In the first half of 2009/10, the financial result improved by €35m year-on-year. It included in particular interest effects of €23m from measurement of loans and hybrid capital conceded to Container Shipping in accordance with the method of effective yield.

Share of results of joint ventures and associates   
The share of results of joint ventures and associates comprised the share in net profit for the year of the associated companies and joint ventures as well as impairments of the goodwill of these companies. In the second quarter of 2009/10, the share of results of joint ventures and associates was in line with the previous year’s level. For the six-month period under review, the decline in the share of results of joint ventures and associates of €14m was primarily attribut­able to the measurement of the 43.33% stake in Container Shipping retained by the TUI Group as an ­associated company in the consolidated financial statements. In the first half of 2009/10, the proportionate result by Container Shipping amounted to €-9m. For the second quarter considered in isolation, Container Shipping posted a positive share of result of €6m.

Underlying EBITA from Continuing Operations
In the second quarter of 2009/10, underlying earnings by the Continuing Operations totalled €-229m, up €45m year-on-year. Cumulative underlying earnings for the first six months totalled €-366m, up €6m year-on-year. EBITA was adjusted for gains on disposal, restructuring expenses, purchase price allocation and one-off items. The adjustments are outlined in detail in the section ‘Consolidated ­turnover and earnings’ and the comments concerning the individual divisions.

Income taxes
Income taxes comprised taxes on profits from the business activities of the Continuing Operations. The tax income of €74m for the second quarter of 2009/10, following €86m in the prior year reference quarter, was attributable to the pronounced seasonality of earnings in tourism. The cumulative tax income for the first half of the year was €146m, up €31m year-on-year.

Result from Discontinued Operations
The result from Discontinued Operations comprised the income and expenses of the Magic Life Group. In the previous year, the result from Discontinued Oper­ations had also included the book profit from the sale of Container Shipping. A year-on-year comparison is therefore of limited value. A detailed breakdown of this item is provided in the section ‘Result from Discontinued Operations’ in the notes.

Group loss   
In the second quarter of 2009/10, the Group result was negative at €-265m ­(previous year: €606m). The year-on-year decline in the Group result was mainly attributable to the book profit from the sale of Container Shipping, included in the result for the previous year’s comparative quarter. The year-on-year decline in the Group result for the first half of 2009/10 was also caused by the book profit included in the prior year comparative period.

Minority interests   
Minority interests amounted to €-88m for the second quarter and €-150m for the first half of the year. They related to the minority shareholders of TUI Travel PLC and companies in the TUI Hotels & Resorts sector.

Earnings per share
After deduction of minority interests, TUI AG shareholders accounted for €-177m (previous year: €744m) of the Group result in the second quarter of 2009/10. As a result, basic earnings per share amounted to €-0.72 (previous year: €2.93) in the second quarter and €-1.16 (previous year: €2.30) for the first half of 2009/10.

Performance indicators