Kuoni results hit hard by Asian tsunami

Kuoni expects business to continue recovering Keystone

The Asian tidal wave disaster last December has had a marked impact on the first half figures of Switzerland's largest travel group, Kuoni.

But despite Kuoni’s operating profit being hit by SFr20-25 million ($15.8-19.7 million) because of the tsunami, net loss was not as bad as feared by market analysts.

It came in at SFr7.2 million, compared with a loss of SFr12.9 million for the same period the previous year.

The figure was helped by a higher financial result and a change in accounting, which meant that goodwill amortisation fell away.

Analysts polled by Reuters had forecast an average net loss of SFr15 million.

Sales stagnate

Sales rose only slightly, from SFr1.572 billion last year to SFr1.577 billion during the first six months, an increase of 0.3 per cent.

The company said in a statement from its Zurich headquarters that with 17 per cent of its sales generated in the affected region, it had felt the consequences of the disaster more than other major European tour operators.

Subsequent cancellations and booking declines had resulted in under-use of both Kuoni’s own and bought-in flight capacities.

Kuoni reported a loss before interest, tax and amortisation (Ebita) of SFr14.8 million, compared with a profit of SFr5.6 million last year.

“The effects of the Asian tsunami did indeed reduce Ebita results by SFr20-25 million,” the Kuoni statement confirmed.

Tsunami and attacks

The company has struggled with the consequences of the Asian tsunami as well as the deadly bomb attacks in London and in the Egyptian Red Sea resort of Sharm el-Sheikh.

Kuoni said in view of the “exceptional events” in the tourism industry this year, it was difficult to predict business results for 2005 as a whole.

But it said it was confident that the present recovery would continue, particularly in those regions adversely affected by the tsunami in the first half of the year.

The group added that in its home market, Switzerland, there was still a difficult market environment.

Its Swiss business unit generated sales of SFr339 million in the first half, an 8.6 per cent decline on the SFr371 million of the January to June period last year.

swissinfo with agencies

Key facts

In the first half of 2005, Kuoni’s turnover was SFr1.577 billon.
The company recorded a net loss of SFr7.2 million, slightly more than half that of the first six months of 2004.
Earnings before interest, taxes and amortisation of goodwill were in the red to the tune of SFr14.8 million, after reaching a positive result of SFr5.6 million at the same time last year.

In brief

Kuoni is Switzerland’s biggest travel company, with 100 agencies across the country.

The company employs 6,400 people around the world, including 1,600 in Switzerland.

17 per cent of Kuoni’s business involves the sale of trips to the areas affected by the Asian tsunami.