Discontinued operation
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On 17 March 2008, TUI AG announced the decision by the Executive Board and the Supervisory Board to separate container shipping from the Group. In line with that decision and the provisions of IFRS 5, the container shipping sector was carried as a discontinued operation in the present interim report as at 31 March 2008.
The discontinued operation comprised the container shipping activities and the interests in the container terminals in Altenwerder and Montreal, Canada. The cruise sector, previously managed in the shipping division, will be retained by the TUI Group and will now be allocated to tourism.
Following the separation of container shipping, the TUI Group will exclusively operate in tourism, its core business sector.
Items of the profit and loss statement of the discontinued operation
|
€ million |
Container shipping Q1 2008 |
Q1 2007 |
|---|---|---|
| Turnover | 1,451.2 | 1,423.7 |
| Cost of sales | 1,430.9 | 1,435.5 |
| Administrative expenses | 30.2 | 48.0 |
| Other income/other expenses | + 5.4 | + 195.0 |
| Financial income | 3.8 | 3.4 |
| Financial expenses | 6.7 | 6.1 |
| Share of results of joint ventures and associates | 5.6 | 1.9 |
| Earnings before taxes on income | - 1.8 | 134.4 |
| Taxes on income | 9.7 | 32.0 |
| of which deferred taxes | 8.8 | 29.5 |
| Earnings after income taxes (Earnings from discontinued operation) | - 11.5 | 102.4 |
Due to the weakening of the US dollar exchange rate against the euro, turnover by the discontinued container shipping operations only rose slightly year-on-year despite a slight increase in transport volumes and a rise in freight rates in US dollars.
In the first three months of the current financial year, earnings by container shipping were considerably down year-on-year. This was due to the one-off gains from the divestment of the minority interest in Germanischer Lloyd AG and the assets and liabilities of the Canadian Montreal Gateway Terminals totalling € 195.8 million, included in Other income for 2007. Underlying earnings, adjusted in particular for this one-off income from divestments, rose substantially on the previous year’s operating earnings due to turnover growth and a slight decrease in costs.
The Other income shown for the current financial year mainly resulted from the divestment of older shipping containers.
Assets and liabilities of the discontinued operation
|
€ million |
Container shipping 31 Mar 2008 |
|---|---|
| Non-current assets | 2,833.9 |
| Current assets | 919.5 |
| Assets held for sale | 3,753.4 |
| Non-current provisions and liabilities | 665.2 |
| Current provisions and liabilities | 894.7 |
| Liabilities relating to assets held for sale | 1,559.9 |
The current assets held for sale included the cash and cash equivalents of container shipping of € 102.6 million. The financial liabilities allocable to container shipping totalled € 390.7 million as at 31 March 2008 (including current financial liabilities of € 26.4 million).
The cumulative expenses of the discontinued operation taken directly to equity totalled € 61.3 million.
Cash flows from operating, investing and financing activities of the discontinued operation
|
€ million |
Container shipping Q1 2008 |
Q1 2007 |
|---|---|---|
| Cash flow from operating activities | + 82.6 | + 27.4 |
| Cash flow from investing activities | - 124.6 | + 108.2 |
| Cash flow from financing activities | + 24.8 | - 155.8 |
| Change in cash and cash equivalents due to exchange rate fluctuations | - 8.0 | - 1.7 |
| Change in cash and cash equivalents | - 25.2 | - 21.9 |