Club Med scraps dividend as it unveils £43m loss

Club Mediterranee yesterday scrapped its dividend after the French resort and tour operator unveiled a net loss of €70m (£43m), its first for four years.

The group, which issued its third profits warning of the year last October, blamed the global tourism downturn that followed 11 September which cost Club Med €60m in exceptional expenses. It has cut jobs and closed 17 resort villages, including those in Morocco, Spain, Israel and Mexico.

The loss, which compares with a profit of €59m a year earlier, is expected to renew calls for the chairman, Philippe Bourguignon, to resign. Mr Bourguignon, who joined Club Med in 1997 on the back of his successes at Disneyland Paris, has been accused of overspending on acquisitions and new club openings. Yesterday, he made it clear that he had no intention to leave.

Club Med said that under these "exceptional circumstances it would be unreasonable to give any forecasts". At 29 December, it said winter bookings were 19 per cent down on the year before.

Mr Bourguignon also warned of tough conditions ahead "because of continued hesitation among consumers".

Revenues for the year to 31 October rose to €1.99bn from €1.89bn. Its operating profit halved to €50m from €103m.