Kuoni Travel Holding Ltd. Half-year report 2005 - Kuoni Group
Kuoni Travel Holding Ltd. Half-year report 2005 - Kuoni Group
Kuoni Travel Holding Ltd. Half-year report 2005 - Kuoni Group
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<strong>Kuoni</strong> half-<strong>year</strong> <strong>report</strong> <strong>2005</strong><br />
Business for the first half of <strong>2005</strong> was strongly influenced by the<br />
continuing effects of the Asian tsunami disaster at the end of the<br />
previous <strong>year</strong>. With 17% of its turnover generated in the regions<br />
affected, <strong>Kuoni</strong> has felt the repercussions of the disaster more<br />
than other major European tour operators. The subsequent cancellations<br />
and booking declines resulted in underutilisation of<br />
both <strong>Kuoni</strong>’s own and bought-in flight capacities. And this – as<br />
predicted at the Annual General Meeting in April <strong>2005</strong> – has<br />
reduced EBITA results by some CHF 20 to 25 million. “In an environment<br />
so marked by unexpected events, the <strong>Kuoni</strong> <strong>Group</strong> delivered<br />
a favourable performance,” comments Armin Meier, Chief<br />
Executive Officer of the <strong>Kuoni</strong> <strong>Group</strong>.<br />
Results of the <strong>Kuoni</strong> <strong>Group</strong><br />
The first-half turnover of CHF 1 577 million was a 0.3% improvement<br />
on the CHF 1 572 million of the prior-<strong>year</strong> period. Organic<br />
growth added 0.9%, the net negative impact of currency movements<br />
reduced turnover by 0.9% and the net effect of acquisitions<br />
and divestments 2 added 0.3% to the overall turnover result.<br />
Gross profit margin slipped from the 22.5% posted for the first<br />
half of 2004 to 21.5%, though 0.3% of this decline is due to the<br />
sale of <strong>Kuoni</strong>’s German retail business. Gross profit margin was<br />
also adversely affected by the turnover declines following the<br />
Asian tsunami disaster. Gross profit fell 4% to CHF 339.7 million<br />
(prior <strong>year</strong>: CHF 353.7 million).<br />
Operating costs rose by CHF 6.4 million. The increase was due in<br />
particular to the expansion of activities in the Asian market. Earnings<br />
before interest, taxes and amortisation of goodwill<br />
(EBITA) were reduced as a result of the adverse effects of the<br />
Asian tsunami disaster to CHF –14.8 million (prior <strong>year</strong>: CHF 5.6<br />
million). The EBITA margin declined from the 0.4% of the prior<strong>year</strong><br />
period to –0.9%.<br />
The net result for the traditionally weaker first six months was<br />
44.2% up, improving from the CHF –12.9 million of first-half<br />
2004 to CHF –7.2 million. Key contributors here included the cessation<br />
of goodwill amortisation in accordance with IFRS accounting<br />
standards and a substantially improved financial result.<br />
The consolidated balance sheet showed shareholders’ equity of<br />
CHF 724.6 million on 30 June <strong>2005</strong> (31 December 2004: CHF<br />
658.5 million) and a solid equity ratio of 37.4% (31 December<br />
2004: 36.2%). The strengthened equity base is the result of net<br />
recognised gains on financial instruments and positive translation<br />
differences. The par value repayment of 8 July <strong>2005</strong> approved by<br />
the <strong>2005</strong> Annual General Meeting will have its balance-sheet<br />
impact in the second half-<strong>year</strong>.<br />
Cash flow from operating activities amounted to an encouraging<br />
CHF 106 million (prior <strong>year</strong>: CHF 102.1 million). Free cash flow<br />
totalled CHF 92 million for the period.<br />
2 Acquisitions and divestments: the purchase of Royal Hansa Cruises Netherlands and the business<br />
activities of CIT-Frantour SA, and the sale of <strong>Kuoni</strong> Reisen GmbH Deutschland and the<br />
Caribbean hotels.