UK travel group Thomas Cook issues profit warning

Thomas Cook company said consumer uncertainty from factors such as Brexit was causing competitive pressure. (Reuters)
Updated 16 May 2019
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UK travel group Thomas Cook issues profit warning

  • The oldest travel company in the world stumbled badly last year when a heatwave in northern Europe deterred holiday makers from booking lucrative last-minute deals
  • Thomas Cook company said consumer uncertainty from factors such as Brexit was causing competitive pressure

LONDON: Travel group Thomas Cook said economic and political uncertainty would affect profits this summer after it reported higher first-half losses on Thursday, adding it had received multiple bids for its airline unit after it was put up for sale.
The oldest travel company in the world stumbled badly last year when a heatwave in northern Europe deterred holiday makers from booking lucrative last-minute deals, leading to two major profit warnings and talk of a need to raise funds.
The company said it made an underlying loss before interest and tax of $315 million (£245 million) in the six months to March 31, compared with a loss of £65 million in the same period a year earlier, reflecting pressure on margins.
It forecast second-half underlying earnings before interest and tax would be below the same period last year, and that it had agreed a £300 million bank facility to provide more liquidity for the 2019/20 winter season.
“Trading for the Group has been challenging to date, reflecting an uncertain consumer environment which has led to a slower pace of bookings across all markets,” it said.
Thomas Cook company said consumer uncertainty from factors such as Brexit was causing competitive pressure, meaning it was having to spend more on promotional activity.
In February, the firm said it was willing to sell its profitable airline business to raise cash to fund its fight back from losses racked up in 2018 and to cope with a tough year ahead.
It said on Thursday it had received multiple bids for all and part of Group Airline, which consists of Germany’s Condor, as well as British, Scandinavian and Spanish divisions.
Lufthansa has said it wants to buy Condor with an option to acquire the remaining airlines, while Virgin Atlantic is also reportedly interested in the UK-based long-haul part of the business.
Thomas Cook added it had taken an impairment of £1.1 billion relating to a 2007 merger with MyTravel.


Egypt inks deal with Cyprus for power link to Europe

Updated 23 May 2019
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Egypt inks deal with Cyprus for power link to Europe

  • It is estimated the project will take 36 months to implement from the start of construction, with the lowest point 3,000 meters below sea-level
  • Phase 1 will see the interconnector carry a capacity of 1,000 MW which can be upgraded to 2,000 MW at a later stage

NICOSIA: Egypt has signed a deal with a Cypriot firm to lay a 310-kilometer (195-mile) cable under the Mediterranean to export electricity to Europe, the company said on Thursday.
Nicosia-based EuroAfrica described the deal, worth an estimated two billion euros, as a “landmark.”
“Cyprus now becomes a major hub for the transmission of electricity from Africa to Europe,” said company chairman Ioannis Kasoulides.
It is estimated the project will take 36 months to implement from the start of construction, with the lowest point 3,000 meters below sea-level.
Phase 1 will see the interconnector carry a capacity of 1,000 MW which can be upgraded to 2,000 MW at a later stage.
“The national electricity grid of Egypt will be linked to the European electricity system through Cyprus and will contribute to energy security,” Kasoulides said.
Following the crises in Crimea and eastern Ukraine, the EU has been keen to develop alternative sources of energy to reduce its dependence on imports from Russia.
In the past year, gas has started flowing from four major new fields off Egypt’s Mediterranean coast, and output is already sufficient to meet domestic needs.
The Arab world’s most populous country is now seeking to develop the infrastructure to export its newfound energy wealth, both as liquefied natural gas and as electricity.
Egypt is also seeking to import gas from fields off Cyprus and Israel to boost the profitability of the new liquefaction and export facilities it is developing on its Mediterranean coast.
In September, Egypt signed a deal with Cyprus to build an undersea pipeline to pump Cypriot offshore gas to Egypt for processing for export to Europe.
The plans have led to closer eastern Mediterranean ties, with Cyprus, Egypt, Greece and Israel holding regular high-level meetings.