*

TUI's EBIT jumps 33%, surpassing some analyst expectations

*

EBIT growth to slow to 7-10% for 2025 amid one-off costs

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Packaged holidays help profit but Western Europe

underperforms

(Updates with share price recovery, analyst quote in para 14)

By Joanna Plucinska, Andrey Sychev and Bernadette Hogg

Dec 11 (Reuters) - Europe's largest tour operator TUI

on Wednesday reported higher profit in the 2024

financial year and projected further growth next year, albeit at

a significantly slower pace than in 2024, initially sending

shares lower in early trading.

While TUI's earnings before interest and tax (EBIT) in the

year ended September jumped 33% to 1.3 billion euros ($1.37

billion) from a year earlier, the company expects EBIT growth in

2025 at a much slower pace of 7% to 10% due to ongoing one-off

costs and despite strong summer bookings.

Shares were up 1.47% around midday as investors digested the

outlook for slowing growth, after initially dropping over 7% in

early trading.

While travel demand has remained robust, TUI has been

impacted by Boeing ( BA ) delivery delays and high one-off costs,

notably amid issues with some of its Embraer jets in Western

Europe, CEO Sebastian Ebel said.

The EBIT figure for 2024 exceeded analyst expectations of

1.293 billion euros in an LSEG poll, though other analysts said

the results were largely in line with expectations.

TUI noted a drop in long-haul customers from the Netherlands

and Belgium, and one-off costs tied to IT investment and plane

repairs. Those resulted in an underlying EBIT in Western Europe

of 10 million euros in 2024, sinking from 79 million euros a

year earlier.

That hampered higher growth, but didn't stop it from seeing

its EBIT surge 33%.

The company bolstered profits with its packaged holidays,

which have flourished as a business in 2024 as inflationary

pressures have spurred consumers to seek cheaper travel options.

Operating profit for its packaged holiday business increased

to 1.1 billion euros in 2024, from 822 million the previous

year, offsetting some of the weakness in other parts of the

business such as in Western Europe.

Still, some analysts were wary of next year's outlook.

"While the tour operator is confident of sustaining further

EBIT and revenue growth in FY25, inflationary pressures and

fragile consumer confidence are likely to weigh on discretionary

spending, with TUI also facing stiff competition from more agile

rivals," said Julie Palmer, partner at Begbies Traynor.

EasyJet ( EJTTF ) has also bolstered its holiday packages

business, which has helped its results this year and is likely

to help further growth next year.

Chief Financial Officer Mathias Kiep told reporters TUI

would reassess its dividend strategy again at the end of 2025.

The company expects revenue growth in 2025 of 5% to 10%,

compared to 12% growth this year to 23.2 billion euros.

($1 = 0.9504 euros)

(Additional reporting by Ilona Wissenbach, editing by Rachel

More, Mrigank Dhaniwala and Bernadette Baum)