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TUI AG’s cruise performance continues to improve

The performance of cruise activities of TUI AG, the world’s largest tour operator, improved further in the second quarter and first half of its financial year.

Operating profit (EBITDA) rose to €16.3 million in three months to 31 March, the second quarter of the group’s financial year, from €5.1 million in the same period a year earlier. Revenues decreased to €82.7 million from €94.0 million.

In the six months to the end of March, EBITDA rose to €18.3 million from a figure negative by €3.4 million in the same period a year earlier. Revenues fell to €136.2 million from €149.2 million.

The revenue figures refer to Hapag-Lloyd Kreuzfahrten alone, as this company is 100% owned by TUI AG. However, the result figures also include TUI’s 50% stake in TUI Cruises.

Consequently. the decline in revenue was attributable to the decommissioning of Columbus 2 from the fleet in April 2014. no turnover is carried for TUI Cruises as the joint venture is measuredat equity in the consolidated financial statements.

There was significant improvement in operating performance of Hapag-Lloyd Kreuzfahrten and lower financing costs due to the purchase of Europa 2 of €5m. With the successful market launch of Mein Schiff 3 in the prior year, TUI cruises continued to expand its competitive position in the winter season and delivered a very successful performance in the first half of the financial year, the company said.

Daewoo interested in acquiring STX France stake -- report

Daewoo Shipbuilding & Marine Engineering (DSME) said on Tuesday that it is considering acquiring STX France, a European subsidiary of struggling STX Offshore & Shipbuilding, which builds cruise ships, a report in Korea Times said

The world's second-largest shipbuilder said its main stakeholder, Korea Development Bank (KDB), had asked it to look into the possibility of taking over the STX France shipyard in Saint-Nazaire, northwestern France.

"We just began the study and, at this point, it is too early to say what we will do," a DSME spokesman was quoted as saying. "The review process may gain speed after our new CEO takes office later this month." Daewoo has staredan ambitionto enter the cruise ship building sector in the past and it has built a number of large overnight ferries to European owners.

KDB, which holds a 31.5% stake in DSME, has sought to dispose of STX Europe as part of a restructuring programme to get STX Offshore & Shipbuilding back on track. STX Europe has two subsidiaries _ STX France and STX Finland.

KDB holds a 48.15% in STX, which owns a 66.66% stake in STX France through STX Europe, which is based in Norway. The remaining 33.34% is held by the French government, who has been pressing KDB to sell the French shipyard as soon as possible. Initially, KDB had sought to complete the sale in 2014, but has been unable to find a buyer for STX France, the report said.

The STX group acquired Aker Yards that it renamed STX Europe in 2008-09 as part of its expansion strategy. However, the outbreak of the financial crisis in 2008 led to a sharp fall in newbuilding orders, which forced STX group to start to restructure its business. It first floated the offshore services vessel unit of STX Europe, which was later acquired by Fincantieri and renamed Vard. STX Finland was acquired by Meyer Werft last year and it is today known as Meyer Turku Shipyard.


United Caribbean Lines granted licence to operate ferry to Cuba

As soon as the U.S. government having approved the re-establishment of ferry links with Cuba, the jostling for positions among the potential service providers began in earnest. Within days United Caribbean Lines (UCL) announced that it had been granted licence by the U.S. Department of the Treasury to operate ferry services between the U.S. and Cuba. Alan Lam reports.

UCL plans to start cruise ferry services from several of the main ports in Florida, including Miami, Tampa, Port Everglades, and Key West, using modern overnight tonnage designed for international services. The company will operate daily passenger services from autumn 2015 onwards under the guidelines of the current U.S. regulations for travelling to Cuba. Arrangements are being made with Cuban authorities.

The UCL plan also includes extending the links to Yucatán Peninsula in Mexico.

The other known contender is the Spanish ferry operator, Baleària, which has also applied for a licence to operate the same service.

Baleària has been operating ferry services in the Caribbean since 2011. It currently connects Fort Lauderdale with Freeport, using BAHAMAS MAMA (formerly ALHUCEMAS) under the Bahamas Express brand name. The route was previously served by the fast ferry PINAR DEL RÍO, which is still based in the region and it is likely to be deployed on a Cuban route should the licence be granted. The ship is already in possession of all the necessary certificates required by the U.S. Coast Guard according to Adolfo Utor, the company’s president.

Baleària initially has plans to operate two routes from the U.S. to Havana: one high-speed service from Key West and the other (probably conventional) from Port Everglades.

The company also plans to establish another link in the region this year, between Fort Lauderdale and Nassau.

Within the same region, Baleària’s “internationalization” strategy also has Puerto Rico and the Dominican Republic in its sight.

With the inclusion of Cuba, and possibly Mexico, the ferry business in the Caribbean is set to take off soon. The competition will be equally fierce.

RCCL orders fourth Quantum class unit; to be delivered in 2019

Royal Caribbean Cruises Ltd. (RCCL), the world's second largest cruise shipping group, said it has entered into an agreement with Meyer Werft in Germany to order a fourth Quantum-class ship, which will be delivered in 2019.

Final contract is subject to e.g. financing.

“Today’s announcement is a reflection of the success of the first two Quantum-class ships,” said Richard D. Fain, Chairman and CEO, Royal Caribbean Cruises Ltd, said in a statement. “We have received a remarkable response from travel agent partners and travelers, and are thrilled that we’ll be able to deliver another revolutionary ship with our partners at Meyer Werft.”

“The fourth Quantum class vessel will be a trailblazer in smart-ship design and vacation innovation,” said Michael Bayley, President and CEO, Royal Caribbean International. “Royal Caribbean International is synonymous with adventure, and the icons and amenities on this ship will continue to challenge and expand guests’ expectations of the cruise experience.”

Based upon current ship orders, projected capital expenditures for full year 2015, 2016, 2017, 2018 and 2019 are $1.6 billion, $2.3 billion, $0.4 billion, $2.4 billion and $1.3 billion, respectively.
Capacity increases for 2015, 2016, 2017, 2018 and 2019 are expected to be 5.5%, 6.3%, 3.1%, 3.9% and 6.5%, respectively. These figures do not include potential ship sales or additions that the company may elect to make in the future.

Norwegian raises second quarter net yield guidance

Norwegian Cruise Line Holdings, the world's third largest cruise shipping group, has raised its guidance for adjusted net yield increase in the second quarter.

The company now forecasts adjusted net yields to rise by 17.5% to 18.5% in the second quarter compared to an earlier fotrecast of a 17.0% to 18.0% rise on as-reported basis

“We are raising the midpoint of our guidance to take into account the better than anticipated interest expense and net yield performance in the first quarter,” said Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd, in a statement.

At the same time, Norwegian lowered its adjusted net cruise cost rise forecast to 23.0% to 24.0% from 27.0% to 28.0% earlier. Forecast for adjusted earnings per share was increased to $0.70 to $0.75 in the second quarter from an earlier forecast of a $0.20 to $0.24 increase.

“We are maintaining our net yield and net cruise cost guidance for the year as benefits from our incremental revenue synergies offset the anticipated foreign currency headwinds and the revenue impact from the unscheduled dry-dock of Norwegian Star. Further, the reinvestment of $20 million into demand-driving initiatives is offset by incremental cost synergies identified in the quarter,” continued Beck.

Norwegian guides full year adjusted net yields to rise by 17.0% and adjusted net cruise costs by 23.5% on as-reported basis. Earnings per share are forecast to reach $2.70 to $2.90, with no change to the previous forecast.