Kuoni to sell loss-making units
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Kuoni has announced plans to sell several of its loss-making units, including online hotel platform Octopus Travel.
The Swiss travel company said that the “evolution of the Kuoni Group’s portfolio” meant that some of its smaller tour operating businesses are no longer relevant. These include tour operations in Italy, Spain, the Netherlands, Belgium and Russia, as well as the consumer booking site, Octopustravel.com.
“Kuoni no longer wants to run these activities and will explore exit options depending on circumstances for each of the various businesses, which may include complete or partial sale, management buy-out, or even termination of activities if no sustainable solutions can be found,” the company said in a statement.
The decision to sell or close the businesses is expected to result in a CHF80 million (US$85.8m) reduction in profits for the current financial year, but in the long-term the company estimates the move could save it around CHF17m per year. Kuoni added that it would now start consultations with employee representatives.
Kuoni achieved net profits of CHF31.8m in 2011, up almost 50% compared to 2010, but this was driven by emerging markets such as Asia and the company’s visa services division, VFS Global.
