The paragraph is a mixed story. It says that the ODS group is profitable - generating £1.1m for the quarter - but this is down from £4.2m from last year. And the business delivered £1.2m in synergies. If I read this right I see two things. Firstly that without the synergy cuts, the combined ODS business would have made a loss. Secondly Fearon stressed that AsiaRooms is profitable. Assuming he was referring to the business of AsiaRooms rather than the whole of the ODS group (John correct me if I am wrong), then it likely means that either or both of LateRooms and Hotelopia have slipped into the red and are losing money. If all true, then this provides further evidence of the pain in Europe right now.
Here is an extract of the entire paragraph (again full pdf here).
Online Destination Services Sector
"ODS reported an underlying operating profit of £1.1m, down £3.1m on the prior year (Q1 08: £4.2m). The sector delivered £1.2m of synergies in the quarter (Q1 08: nil) from the integration of the former TUI and First Choice businesses in our incoming agency division, primarily in Spain. The offline businesses, however, suffered from a decrease in volumes in the quarter due to the capacity reductions implemented by tour operators. Additionally, the agencies in Euro destinations experienced a reduction in excursion revenue due to the strengthening of the Euro against Sterling and as a result margins tracked behind last year. The online businesses continue to perform well."