The Kuoni Group increased its first-half turnover by a substantial 11.2% in 2006, from the CHF 1 577 million of January-to-June 2005 to CHF 1 753 million. Organic growth added 10.3% to first-half turnover and currency movements…
The Kuoni Group increased its first-half turnover by a substantial 11.2% in 2006, from the CHF 1 577 million of January-to-June 2005 to CHF 1 753 million. Organic growth added 10.3% to first-half turnover and currency movements raised it by 1.0%, while acquisitions and divestments2 had a neutral net effect.
Turnover was increased year-on-year in all the Group’s business units. Gross profit rose 9.4% from CHF 339.7 million to CHF 371.6 million on the strength of the higher turnover volume. Gross profit margin slipped marginally from the 21.5% of Januaryto-June 2005 to 21.2%. The decline is primarily attributable to the lower margins achieved in Switzerland and Scandinavia in the face of higher fuel prices.
Operating costs increased CHF 16.6 million, from the CHF 354.5 million of the prior-year period to CHF 371.1 million. The rise is due mainly to the expansion of the Group’s Asian activities and of its Destination Management network. Earnings before interest and taxes (EBIT) improved to CHF 0.5 million (compared to minus CHF 14.8 million for the first half of 2005), owing largely to positive business trends in the Destination Management segment and strong performances from the Group’s Asian and Scandinavian subsidiaries.
The net result for the traditionally weaker first half-year was improved from the minus CHF 7.2 million of 2005 to CHF 8.1 million, thanks to stronger operating performances in all business units.
Cash flow from operating activities amounted to a very strong CHF 144.8 million, a 36.6% increase on the CHF 106.0 million of the prior-year period. Free cash flow stood at CHF 128.4 million (against CHF 92.0 million a year ago), again underlining the benefits of the minimal vertical integration that is a cornerstone of the Kuoni business model.
The balance sheet showed total equity of CHF 576.5 million on June 30, 2006 (compared to CHF 581.8 million on December 31, 2005) and a sound equity ratio of 31.5% (compared to 35.1% at the end of last year). The change in the equity base was due to adjustments to the market values of financial instruments and currency translations. The second reduction in the nominal value of Kuoni shares which was resolved at the 2006 Ordinary General Meeting was effected on August 15, 2006 and will thus not impact on equity levels until the second half of the year.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
