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Norwegian group raises private offering of notes by 20% to $600 million

  • Written by Kari Reinikainen

Norwegian Cruise Line Holdings Ltd. (NCLH), the world’s third largest cruise shipping group, said that its subsidiary, NCL Corporation Ltd.has entered into an agreement to sell $600.0 million aggregate principal amount of 4.625% senior unsecured notes due November 2020 in a private offering.

“The size of the offering was increased from $500.0 million to $600.0 million. The Notes are to be issued at par,” NCLH said in a statement.

“The company expects to use the net proceeds from the Offering, after deducting the initial purchasers' discount and estimated fees and expenses, to redeem and discharge its outstanding 5.00% Senior Notes due 2018 and for other general corporate purposes, which may include debt repayment and/or opportunistic repurchases of common stock from time to time under its ongoing share repurchase program,” NCLH said.

North American cruise capacity could contract 2017 on China transfers

  • Written by Kari Reinikainen

Cruise industry's capacity in the North American market may contract in 2017 in the wake of transfers of vessels to China, said Robin Farley, cruise industry analyst at UBS Securities in New York.

"CCL (Carnival Cruise Line) announced last week they will be deploying two more ships, 2,124-berth Carnival Miracle and 3,000-berth Carnival Splendor, to sail year-round in China starting in spring '17 and spring '18, respectively. While CCL had previously indicated a Carnival brand ship would go to China in '17, the '18 deployment was incremental," she said in a research note.

These redeployments will reduce the 2017 capacity growth to 0.8% from an earlier estimate of 1.3% and that of 2018 to 3.9% from 4.8%.

"We often know about ship withdrawals only a few months in advance, so the true net increase is typically a couple of percentage points lower than the gross increase, so we believe 2017E (estimate) could end up being negative for North American cruise capacity, which has never happened before," Farley said

RCCL orders fifth Quantum class ship at Meyer Werft

  • Written by Kari Reinikainen

 Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, announced that it has entered into an agreement with Meyer Werft in Germany to order a fifth Quantum-class ship for delivery in the autumn of 2020.

"It is such a pleasure to announce the order of another Quantum-class ship as we are welcoming Anthem of the Seas to North America," said Richard D. Fain, Chairman and CEO, RCCL, in a statement.

"These ships have been received with excitement, and performed exceptionally well, across the globe. We fully expect that momentum to continue as we add to this innovative class of ships."

"At Royal Caribbean we are focused on continuously improving efficiency and sustainability, and the fifth Quantum class vessel will be clear evidence of this," said Michael Bayley, President and CEO, Royal Caribbean International, the RCCL group’s contemporary market unit that operates the Quantum class vessels.

"Of equal importance is our ability to consistently surpass guest expectations, and we are harnessing the power of the latest technology to do so on this ship."

Based upon current ship orders, projected capital expenditures for full year 2015, 2016, 2017, 2018 and 2019 are $1.6 billion, $2.4 billion, $0.5 billion, $2.5 billion and $1.4 billion, respectively.

Capacity increases for 2015, 2016, 2017, 2018 and 2019 are expected to be 5.4%, 6.4%, 3.4%, 3.7% and 6.6%, respectively. These figures do not include potential ship sales or additions that we may elect to make in the future.

Norwegian group on track to reach EPS of $5.00 in 2017 - del Rio

  • Written by Kari Reinikainen

“The momentum from the initiatives we have implemented is building and is reflected in the solid foundation of bookings which, coupled with the powerful earnings growth from our existing fleet and upcoming ship additions, have positioned 2016 to be a breakout year,” said Frank Del Rio, President and CEO of the company, in a statement.

“With a clear path to significant earnings growth, we are confident in our targets of $5.00 earnings per share in 2017 and growing our already industry leading return on invested capital to 14% by 2018,” he continued.

The delivery of Norwegian Escape in October marks the latest chapter in the Company’s measured newbuilding programme which provides ship deliveries each year through 2019.

“The company will take delivery of two additional ships in 2016. Sirena will join Oceania Cruises in March with her first sailing in late April following a 35-day, multi-million dollar upgrade and refurbishment. Seven Seas Explorer will join the Regent fleet in the third quarter,” the company said.

Norwegian narrows 2015 EPS guidance to $2.85 to $2.90 per share

  • Written by Kari Reinikainen

Norwegian Cruise Line Holdings (NCLH), the world’s third largest cruise shipping group, says it has narrowed its earnings per share (EPS) guidance to $2.85 to $2.90 per share in light of strong net yield performance in the third quarter. Its previous forecast was $2.80 to $2.90 per share.

“As a result of strong Net Yield performance the Company has increased its full year 2015 Adjusted Net Yield guidance. Adjusted Net Cruise Cost Excluding Fuel is expected to modestly increase due to the aforementioned timing of certain expenses. As a result of these changes, the Company narrowed the range and raised the midpoint of its full year 2015 Adjusted EPS guidance which is now $2.85 to $2.90,” the company said in a statement.

“The alignment of revenue management strategies across our three brands has resulted in a lengthening of the booking curve, enabling us to drive higher pricing, particularly on the Norwegian brand,” said Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings. “This stronger pricing is contributing to robust earnings growth of approximately 27% in 2015, and brings our three year compound annual growth rate to over 40% since our initial public offering in 2013,” continued Beck.

CBR 2/2015 contents

CBR 1/2015 contents

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