- Rolls Royce Power System reports stable first half 2014 revenues
- Online bookings continues rapid growth at Thomas Cook
- Silver Galapagos to undergo second phase of refurbishment
- Norwegian Cruise Line introduces All-Inclusive package
- Carnival Cruise Lines and Dallas Cowboys announce multi-year partnership
- Category: Top Headlines
- Published on Wednesday, 30 July 2014 15:36
- Written by Teijo Niemelä
Princess Cruises, a subsidiary of Carnival Corporation & plc, has reached an agreement with the Italian shipbuilder Fincantieri to build a new ship, which will enter service in 2017.
The as-yet unnamed 143,000-ton vessel, which will be built at an all-in cost of approximately 600 million euros, will carry 3,560 passengers, and feature the successful design platform introduced by sister ships Royal Princess in 2013 and Regal Princess which entered service this past May.
The new ship will include the signature elements that have become synonymous with the Princess Cruises guest experience such as a soaring central atrium hub with multiple dining, entertainment and retail venues; the adults-only Sanctuary; Movies Under the Stars cinema experience, and 80 percent of all staterooms with balconies. The ship will also include some brand-new innovations to enhance the guest experience even further.
“We are incredibly excited to add this fabulous new ship to our already formidable fleet,” said Jan Swartz, Princess Cruises president. “Royal Princess and Regal Princess have been exceptionally successful for us and have received numerous accolades from guests, travel agents and media, so adding another sister ship will enable us to continue to expand our innovative vacation experiences. We’re very pleased that this new ship order is an indication of the confidence that our parent Carnival Corporation has in the future of the Princess brand.” She added that this is the only new order Carnival Corporation & plc anticipates for 2017.
Specific features and amenities for the ship, along with deployment details, will be revealed in the coming months.
Giuseppe Bono, Fincantieri Chief Executive Officer, commented: "All the orders we win are important for our Group, but some are more special than others. The one we're announcing today certainly belongs to this select category. In fact, it's no coincidence that Fincantieri is the universally recognized leader among the builders of cruise ships. It's a source of great pride to be able to immediately build another ship for a prestigious brand like Princess Cruises following the successful deliveries of two jewels like "Royal" and "Regal," which have already become part of maritime history." Bono ended by saying, "Our objective has always been to build ships of the future, and thanks to the Carnival Group, the leading market player, which has reconfirmed its well-founded confidence in us, we have proven over time not only to have kept faith with this ambitious goal but also to have been able to consolidate our world leadership in a sector of absolute technological excellence, like cruise ships."
- Category: Top Headlines
- Published on Monday, 28 July 2014 21:03
- Written by Teijo Niemelä
Norwegian Cruise Line today reported results for the quarter ended June 30, 2014, and provided guidance for the third quarter and full year 2014.
“This quarter marks the first full quarter with both Breakaway-class ships in operation,” said Kevin Sheehan, president and chief executive officer of Norwegian Cruise Line. “Along with Norwegian Epic, these newer, premium, earnings-rich ships now comprise a little over a third of our capacity and contributed to the doubling of earnings in the quarter” continued Sheehan.
For the second quarter of 2014, the Company reported Adjusted EPS of $0.58, on Adjusted Net Income of $121.1 million, compared to $0.29 for the same period in 2013. On a GAAP basis, diluted earnings per share and net income were $0.54 and $111.6 million, respectively.
Net Revenue in the period increased 23.6% to $595.7 million driven by a 19.6% increase in Capacity Days and a 3.3% improvement in Net Yield (3.0% on a Constant Currency basis). The increase in Capacity Days was primarily from the addition of Norwegian Getaway and Norwegian Breakaway to the fleet in January 2014 and April 2013, respectively, and was partially offset by the planned dry-dock of Norwegian Jewel. The Net Yield improvement was due to higher Occupancy Percentage, higher onboard and other revenue and benefits from initiatives to reduce our cost of sales. Revenue for the period increased to $765.9 million from $644.4 million in 2013.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day decreased 2.3% (2.7% on a Constant Currency basis). The Company’s fuel price per metric ton, net of hedges, was $622 compared to $686 in 2013. Fuel consumption per Capacity Day in the quarter decreased 5.1%.
Interest expense, net was $31.9 million for the quarter. Interest expense, net in the same period in 2013 was $103.7 million which included $70.1 million of charges related to the refinancing of certain credit facilities and the redemption of certain of the Company’s senior unsecured notes. Excluding these charges, Adjusted Interest Expense, net was $33.6 million in 2013.
2014 Guidance and Sensitivities
In addition to the results for the second quarter, the Company also provided the following guidance for the third quarter and full year 2014, along with accompanying sensitivities.
“We are pleased to reiterate full year earnings guidance given the current promotional environment,” said Sheehan. “We are taking advantage of opportunities to strategically invest in initiatives to increase brand awareness and enhance the guest experience to drive long term returns.”
As of June 30, 2014, the Company had hedged approximately 76%, 59%, and 37% of its remaining 2014, 2015 and 2016 projected metric tons of fuel purchases, respectively.
Future capital commitments consist of contracted commitments, including future expected capital expenditures for business enhancements and ship construction contracts. As of June 30, 2014 anticipated capital expenditures together with amounts for ship construction and related export credit financing were as follows (in thousands, based on the euro/U.S. dollar exchange rate as of June 30, 2014):
Company Updates and Other Business Highlights
The Company recently announced an order for two Breakaway Plus-class ships with export credit financing in place. The contract price for the 164,600 gross ton, 4,200-berth vessels is euro 1.6 billion, with deliveries scheduled for spring 2018 and fall 2019. This latest order brings the total number of newbuilds under contract with Meyer Werft to four, with Norwegian Escape scheduled for delivery in October 2015.
In April, the Company announced the authorization by its Board of Directors of a three-year, $500 million share repurchase program. During the second quarter, the Company repurchased approximately 2.4 million shares at an average price of $33.02 per share under this program.
In May, the Company announced Norwegian NEXT, a two-year, $250 million investment in “new enhancements, experiences and transformations” across the fleet. The program is aimed at elevating the guest experience through ship revitalizations, enhanced dining and beverage programs, enriched entertainment and destination experiences and technological advances. The program also includes initiatives aimed at reducing the Company’s impact on the environment, including the installation of exhaust gas scrubbers on six of the Company’s current ships and all four of its upcoming newbuilds. Fleetwide enhancements to the dining program include new menus with expanded offerings in complimentary dining venues, the rollout of the popular O’Sheehan’s Neighborhood Bar & Grill and Moderno Churrascaria concepts and the addition of Carlo’s Bake Shop treats to cafes across the fleet. Beverage program enhancements include a new wine list developed in partnership with the Michael Mondavi Family, destination-specific cocktail menus created by the James Beard Award-nominated mixologists at Bar Lab and the expansion of the Sugarcane Mojito Bar concept. Regarding entertainment, the Company’s new, state-of-the-art rehearsal facility, Norwegian Creative Studios, will be the source for new production shows while the Company expands its Nickelodeon family offerings to include new activities and dining experiences with one’s favorite characters. Investments in technology include an enhanced pre-cruise booking experience and interactive digital displays positioned in strategic locations throughout every ship allowing guests to reserve dining, shore excursions and other activities. The Company is also investing in improvements to its private island in the Bahamas, Great Stirrup Cay, with new venues such as the Bacardi Bar while construction continues on its upcoming eco-friendly western Caribbean destination in Belize, Harvest Caye.
- Category: Top Headlines
- Published on Thursday, 24 July 2014 16:10
- Written by Kari Reinikainen
A recovery in the British economy has resulted in a strong recovery of advance bookings at Fred. Olsen Cruise Lines, the UK based destinational operator of four medium sized ships, Mike Rodwell, Managing Director of the company, told Cruise Business Online. The company has made losses since the start of the financial crisis, but Rodwell would not elaborate on how quickly the recovery in bookings would turn the company back to profitability.
CRUISE BUSINESS COMMENTARY – Why Fred. Olsen’s Poison, Murder and Mystery cruise is worth a few lines
- Category: Top Headlines
- Published on Friday, 25 July 2014 12:51
- Written by Kari Reinikainen
When the top brass of Fred. Olsen Cruise Lines – including its chairman Fred. Olsen Snr. that rarely appears in public - on 24 July took to the stage at the Tower of London, they wanted to talk about one cruise only: The Poison, Murder and Mystery cruise (see separate article under More News for details) that is scheduled to depart from the Scottish port of Rosyth on 10 July next year.
Also present at the event was Her Grace The Duchess of Northhumberland, whose idea the cruise actually was. The Duchess told Cruise Business that she had met Olsen and it emerged that they both had poison garden, Her Grace at the ducal family’s country seat at Alnwick in the North East of England and Olsen in Teneriffe in the Canary Islands in Spain.
Professional actors will set the pace to the events on board the 880 passenger Boudicca as it sails south from its Scottish base to Spain, Portugal and the Atlantic islands. A professional author will write a storyline, based on developments of the murder mystery that forms the backbone of the entertainment of the cruise. Passengers are active encouraged to participate in the story by assuming a character in it and dressing in 16th century Florentine dress, the period and location in which the story is set.
It is here that the concept becomes interesting.
Passengers on cruise ships are largely consumers of entertainment: they watch shows, comedians and listen to concerts and singers etc. True, activities like sport include active participation by the passengers, but these are mainly daytime functions. In the evening, an overwhelming majority of the passengers watch professional entertainers to perform.
The Poison, Murder and Mystery cruise promises to change that. Nathan Philpot, marketing director at Fred. Olsen Cruise Lines said the company has contacted Guinness Book of Records to make this cruise with the largest number of participants in on board entertaining ever seen on any ship.
Fred. Olsen operates a fleet of four medium sized vessels. In recent years, it has diversified its product by offering longer stays in port, often overnight in key ones, plus widening further its already extensive portfolio of cruises by adding shorter ones, with extended port stays.
The company’s ships were built between 1973 and 1994, so none of them is exactly new and as they range in size from 23,000 to 45,000 gross tons, they are not particularly large either. Hence they cannot provide a Wow! effect with stunning size and facilities of the ships, no matter how well they are maintained and how well they are run. And they are, both.
Instead, their smaller size invites more interaction between those on board for the simple fact that you are more likely to meet the same passenger or crew member than on a megaship.
The company arranged a Titanic memorial cruise in 2012, when it became 100 years from the tragedy. Passengers were encouraged to dress in period attire, many did and it is on this positive experience the company wants to capitalise as well.
The cruise industry is supply driven: lines that build new ships market them aggressively and usually gain a large degree of interest from the public as a result. What Fred. Olsen Cruise Lines is planning to do is to take a completely different tack: as its old slogan used to say, “It’s All About the People.”
Royal Caribbean reports second quarter results, updates 2014 guidance and introduces Double-Double program
- Category: Top Headlines
- Published on Thursday, 24 July 2014 12:48
- Written by Teijo Niemelä
Royal Caribbean Cruises Ltd. today reported second quarter results, updated full year guidance and introduced its Double-Double Program, a new three-year profitability initiative.
Second Quarter 2014 results:
– Net Yields were up 2.6% on a Constant-Currency basis (up 2.4% As-Reported).
– Net Cruise Costs ("NCC") excluding fuel were down 4.7% on a Constant-Currency basis (down 4.2% As-Reported), better than guidance mainly due to timing.
– Adjusted Net Income of $146.7 million, or $0.66 per share, versus Adjusted Net Income of $34.2 million, or $0.15 per share, in 2013.
– US GAAP Net Income was $137.7 million or $0.62 per share versus $24.7 million, or $0.11 per share in 2013.
Full Year 2014 forecast:
– Net Yields are expected to increase 2% to 3% on a Constant-Currency basis (2% to 3% As-Reported).
– NCC excluding fuel are expected to be flat to slightly down on a Constant-Currency basis (Approx. flat As-Reported).
– Adjusted EPS is expected to be in the range of $3.40 to $3.50 per share. This is a $0.10 increase from the mid-point of the company's previous guidance.
The Double-Double Program is designed to achieve two important goals by 2017: increasing the company's Return on Invested Capital (ROIC) to double digits and doubling 2014 EPS. The company also believes that articulating clear and specific goals helps guide internal decision-making as well as better informing investors of the path of the business.
"Our focus over the last few years on improving investment returns with moderate capacity growth is clearly paying dividends," said Richard D. Fain, chairman and chief executive officer. "Our brands have never been stronger and we are well positioned for continued step change in performance. The Double-Double Program sets demanding, but realistic targets, against which we will measure our continued progress."
SECOND QUARTER RESULTS
Adjusted Net Income for the second quarter of 2014 was $146.7 million, or $0.66 per share, compared to Adjusted Net Income of $34.2 million, or $0.15 per share, in the second quarter of 2013. US GAAP Net Income for the second quarter 2014 was $137.7 million or $0.62 per share, compared to $24.7 million or $0.11 per share in 2013.
Net Yields on a Constant-Currency basis increased 2.6% during the quarter. This was at the high end of the company's guidance driven by strong close-in booking trends for European and China sailings despite continued softness in the Caribbean. Yields were up double digits in Europe and China offsetting the Caribbean's softness.
"Higher pricing for close-in European sailings propelled us above the top end of our guidance for the quarter," said Jason T. Liberty, chief financial officer. "While the environment in the Caribbean remains promotional, our European itineraries continue to resonate well with strong demand from all markets."
Onboard revenue initiatives continue to deliver positive results with a 3% increase for the quarter. This is the tenth consecutive quarter of onboard revenue growth.
Constant-Currency NCC excluding fuel decreased 4.7%, which is 220 basis points better than the mid-point of guidance mainly due to timing. Approximately $16 million of expenses expected to be incurred during the second quarter were deferred to the second half of the year. Bunker pricing net of hedging for the second quarter was $711 per metric ton and consumption was 341,000 metric tons.
FULL YEAR 2014
The company has raised full year Adjusted EPS guidance to a range of $3.40 to $3.50 driven by a successful second quarter. Outperforming the mid-point of guidance for the second quarter by $0.16, with $0.07 related to the timing of expenses, drove the increase. Constant-Currency Net Revenue Yields and Net Cruise Costs excluding fuel are expected to be consistent with our previous guidance of up 2% to 3% and flat to slightly down, respectively.
"It is gratifying to raise our 2014 EPS guidance again," said Jason T. Liberty, chief financial officer. "Overall business has been solid and our equity investments continue to outperform, allowing us to deliver even better returns to our shareholders."
Bookings since the April earnings call have been up nicely and the company continues to be booked ahead of last year in both load factor and APD. Double-digit yield improvement on European and China sailings is helping offset a continued promotional environment in the Caribbean.
NCC excluding fuel are expected to be flat to slightly down on a Constant-Currency basis and approximately flat on an As-Reported basis. Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2014 Adjusted EPS to be in the range of $3.40 to $3.50 per share.
THIRD QUARTER 2014
Constant-Currency Net Yields are expected to be up approximately 4.0% in the third quarter of 2014. NCC excluding fuel are expected to be flat to up 1% on a Constant-Currency basis. Equity investments for the third quarter are expected to increase, mainly driven by the addition of TUI Cruises' Mein Schiff 3. Based on current fuel pricing, interest rates and currency exchange rates and the factors detailed above, the company expects third quarter Adjusted EPS to be approximately $2.20 per share.
In recent years, the company has focused heavily on improving investment returns with moderate capacity growth. Due to the success of this approach, management believes that now is an appropriate time to publicly articulate long-term goals for both ROIC and EPS.
"We are delighted to see how well our brands are doing in the marketplace," said Richard D. Fain, chairman and chief executive officer. "Our teams have worked diligently to solidify the company's market position while maintaining strong cost discipline. This has allowed us to target double digit ROIC and a doubling of earnings within three years."
Ports & Destinations
- Trasmediterranea to provide port handling services in Balearic Islands
- Mein Schiff 3 will inaugurate the lengthened pier in La Gomera
- Construction of Hamburg's third cruise terminal commences
- Denmark's Fredericia receives its first cruise ship call
- Fred. Olsen Cruise Lines return to Liverpool; Thomson and CMV will not
- Cruise & Maritime Voyages in “buy one, get one free” UK-Australia offer
- Suite & Balcony Sale offers deals on Princess Cruises
- MSC Cruises promotes Autumn Mediterranean sailings in UK
- Oceania Cruises offers savings and flight upgrades in UK on Black Sea cruise in September
- Windstar Cruises celebrates America's birthday with savings
- STX France begins construction on world's largest cruise ship
- Crystal creates visual magic with water for the AquaTheater on the Oasis and Allure
- Allure of the Seas features 3D digital cinema engineered by FUNA
- Allure of the Seas sails with KONE people flow solutions
- Starbucks and Royal Caribbean to offer first ever Starbucks at sea on Allure of the Seas
Products & services
Air & Sea
- Etihad to add six new destinations during the first half of 2015
- Enhanced security measures at certain airports for U.S. bound flights
- Emirates inceases capacity on two more U.S. routes from December 2014
- New Heathrow megaterminal starts operations
- Alaska Airliners to increase its Seattle departures by 11% next spring