Warm European weather takes toll on Thomas Cook’s profit forecast

Thomas Cook makes all its profit in the summer when its customers in northern Europe go on holiday, primarily in southern European destinations such as Spain, Turkey and Greece. (Reuters)
Updated 31 July 2018
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Warm European weather takes toll on Thomas Cook’s profit forecast

LONDON: British travel company Thomas Cook Group said its annual profit would come in at the lower end of expectations after hot summer weather in Europe affected late holiday bookings.

Thomas Cook makes all its profit in the summer when its customers in northern Europe such as Britain, Germany and Scandinavia go on holiday, primarily in southern European destinations such as Spain, Turkey and Greece.

But northern Europe has experienced warmer than average weather over the summer so far, affecting late bookings. Thomas Cook said that full-year underlying operating profit would now be at the lower end of market expectations.

The downgraded outlook comes after the company was reported by a British newspaper to be considering splitting off its airline and selling a stake to an outside investor to reduce debt.

The company runs both a tour operator business and an airline, and said in its third quarter statement on Tuesday that a strong performance from its airline, especially in Germany, had helped to offset the impact of a warm summer.

“The sustained period of hot weather in June and July has led to a delay in customer bookings in the tour operator, restricting our ability to drive margins in the ‘lates’ market,” Thomas Cook said in a statement on Tuesday.

Thomas Cook had guided in May that it was on track to meet analysts’ expectations of a 7 percent rise in its post-operating profit to £352 million ($462.04 million) for the 12 months to Sept. 30, on a constant currency basis.


Contractor appointed for $1.4bn Jubail Island project in Abu Dhabi

Updated 44 min 40 sec ago
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Contractor appointed for $1.4bn Jubail Island project in Abu Dhabi

  • Project will be open to foreign property investors
  • Gulf Contractors Company to carry out enabling works

LONDON: A contractor has been appointed to carry out initial works for a $1.4 billion island development in Abu Dhabi.

Gulf Contractors Company won the enabling works contract for the Jubail Island project in the UAE capital, the company behind the development said.

The works under the contract are scheduled for completion in January 2020, according to the Jubail Island Investment Company (JIIC), the UAE state news agency WAM reported.

Enabling works generally involve major earthworks and grading of a site, ahead of the installation of infrastructure such as roads, utilities, and other facilities. 

Over 2.5 million cubic meters of material will be excavated and placed to create the formation level for over 40 kilometers of roadways and more than 800 residential properties as part of the contracted works, according to WAM.

The giant Jubail Island project will span six “investment zone villages” and will be home to between 5,000 and 6,000 residents, according to the developer. 

The project, which has 13 kilometers of waterfront and is being built on a natural island in Abu Dhabi emirate, is slated for completion in the fourth quarter of 2022.

“Offering housing, commercial, leisure and freehold investment opportunities particularly for Emiratis and expatriates is a central planning element for Jubail Island,” said Mounir Haidar, managing director of JIIC.

“Today’s announcement confirms the timely delivery of the newly launched project in conformity with leading construction and environmental standards.”

Abu Dhabi in April amended its real estate laws, lifting restrictions on foreigners owning freehold properties in certain free zones in the emirate.