TUI says earnings before interest and amortisation (EBITA) growth was driven by its hotel and cruise brands, which continued to deliver high occupancy levels.
The strong results were supported by a good performance in the Western Mediterranean and the Caribbean, a recovery in demand for South Africa and Turkey and new hotel openings.
Overall, 56% of earnings were generated from its hotel and cruise brands. This performance could be further supported by the recovery in Turkey as hotel bookings over next summer are up 70% for the Middle Eastern country.
EARNINGS GROWTH SET TO CONTINUE
TUI is forecasting 10% growth in underlying EBITA in the year to September 2018. It has extended the same earnings guidance to 2020.
Analysts expect dividends to grow in line with earnings, indicating double-digit growth.
According to TUI, more demand from countries such as Canada to popular destinations like the Carribean is helping to drive business over the traditionally quieter winter months.
Panmure Gordon analyst Mark Irvine-Fortescue remains cautious on the capital required to sustain high profit growth, highlighting capital expenditure of €1.2bn.