Club Med’s operating profit falls

Club Mediterranee has posted a 67 percent jump in full-year net profits, although it has showed a sharp drop in operating profits. Analysts have put this down to a lack of snow at ski resorts and an unsuccessful bid to move upmarket.
Full year operating profits for Club Med ammounted to 35 million euros, down from 81 million a year earlier. Net profits were five million euros for the period ending October 30 compared to 3 million euros a year ago.

‘Club Med is now in growth and profitable,’ CEO Henri Giscard d’Estaing told a press conference. “In 2007 we hope to reap the benefits of the change to our new business model that will be fully in place at the end of 2008.”

Club Med says it will continue its strategy of catering to more upscale clientele and is revamping its holiday villages.

However, operating profits were at the low-end of the range expected by city analysts.

The company has seen a disappointing market in France and flat demand in Europe. However, winter bookings were up 10.2 percent year on year, led by a 47 percent rise in Asia.