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AIDA appoints Eichhorn President as Ungerer moves to Asia

AIDA Cruises, the German unit of Carnival Corp & plc, has appointed Felix Eichhorn as President as the current incumbent, Michael Ungerer, will take up a new position with Carnival Asia, the German company said in a statement.

Eichhorn has so far worked as Senior Vice President Sales at the Rostock based company.

Ungerer will take up the position of Chief Operations Officer Shared Services at Carnival Asia, which is based in Singapore, AIDA said.

Norwegian to bring forward China decision from Spring 2016

Norwegian Cruise Line, the contemporary market unit of Norwegian Cruise Line Holdings (NCLH), is likely to bring forward the decision whether or not it will base a vessel in China from Spring 2016, said Frank del Rio, NCLH President and CEO.

“Our Skunk Works team has substantially completed its assessment of entering the China-sourced market with a dedicated vessel perhaps as early as 2017. Our original expectations, if you recall, were to announce a go – no-go decision by spring 2016,” del Rio said in a conference call on Tuesday.

“However, given the significant progress made to-date, we now expect an announcement to come sooner than we had initially anticipated,” he noted

He said Norwegian would  continue to evaluate the opportunity to offer Asian-centric product geared toward consumers in the region, particularly those in China.

We have the benefit of learning from the industry's initial entry into the market and are building our intelligence and crafting a strategy for the best way to enter the market.

Scarcity of offerings to drive up Norwegian yields – del Rio

Norwegian Cruise Line, the contemporary market unit in Norwegian Cruise Line Holdings (NCLH) group, will drive yields higher by diversifying its itineraries to create scarcity of offerings, said Frank Del Rio, President and Chief Executive Officer of NCLH.

“Looking at the Norwegian brand, just yesterday, we announced one of our most ambitious and diverse itinerary offerings in recent years. This diversified deployment is another example of exchanging of best practices between brands. In this case, we are weaving in the concept of itinerary scarcity that has proven successful at Oceania and Regent into the Norwegian deployment strategy,” he said in a conference call earlier this week.

This involves diversifying itineraries not only for repositioning voyages, but more importantly for seasonal and year-round regional and homeport deployments. “Itinerary scarcity breaks up the glut of repetitive sailings or milk runs that in essence tend to commoditize voyages in a given deployment. Whereas in the past, the Norwegian brand focused on freedom, flexibility and choice in the on-board experience, we are now taking these important attributes and expanding them to be in the destination experience as well,” del Rio said.

He used a couple of examples to demonstrate this new itinerary development concept. “First is diversification of offerings with an entirely new group of itineraries. Using the expertise of the Oceania and Regent itinerary development team, we've crafted a deployment plan for Norwegian Star to begin sailing to Asia and Australia targeting Western guests.”

Norwegian Cruise Line has received appeals from loyal guests to offer sailings in the Australia-Asia region, where it last had a ship 15 years ago. “Echoing this sentiment is a fairly vociferous and growing group of Australians and New Zealanders who have sailed on Norwegian ships in other parts of the world and who have requested time and time again that we bring our unique Freestyle offering down under. Norwegian Star's seasonal deployment will satisfy both contingents and mark the brand's return to the region after a 15-year absence,” del Rio commented.

"The second example is one of diversification of itineraries in some of Norwegian's most popular homeports. In the past, Norwegian was known for having almost exclusively seven-day identical and repetitive sailings or again, milk runs from certain ports, resulting in weeks and weeks of supply with no differentiation."


AIDAprima maiden voyage postponed to April 2016 from October 2015

The maiden voyage of AIDAprima, the first of two 124,500 gross ton ships AIDA Cruises in Germany has on order from Mitsubishi Heavy Industries in Japan, will be postponed to April 2016 from October 2015, the German cruise shipping company said in a statement.

The postponement is due to the fact that the shipyard will not be able to complete ship as planned. This is the second time the delivery of the ship has beeb postponed - initially, it was due to enter service in June this year.

AIDA Cruises is part of the Carnival Corporation & plc group.

Norwegian Cruise Line Holdings reports financial results for the second quarter 2015

Norwegian Cruise Line Holdings Ltd., today reported financial results for the quarter ended June 30, 2015 and provided guidance for the third quarter and full year 2015.

Second Quarter 2015 highlights

– Improvement in Adjusted EPS of 29.3% to $0.75 on Adjusted Net Income of $171.6 million.
– Increase in Adjusted Net Yield on a Combined Company basis of 1.5%, or 3.2% on a Constant Currency basis, driven by pricing improvement in the quarter.  Increase of 18.2% on an as reported basis.
– Continued synergy identification efforts from the integration of Norwegian and Prestige lead to synergies of $75 million in 2015 and $125 million in 2016 prior to reinvestment.

Second quarter 2015 results

“The benefits of the combination of Norwegian and Prestige are beginning to hit their full stride, resulting in strong earnings growth in the quarter,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.  “Many of the strategies we have previously communicated are gaining more and more traction, from the weaving of Prestige’s go to market strategy into the Norwegian brand’s pricing and marketing practices, to the focus on adding value for our guests in lieu of discounting, in addition to leveraging our scale to maximize cost efficiencies,” continued Del Rio.

The Company generated Adjusted Net Income of $171.6 million, or $0.75 per share.  Adjusted EPS increased 29.3% over prior year and was at the top end of the Company’s guidance benefiting from solid Net Yield performance along with favorable timing of certain expenses.  On a GAAP basis, Net Income was $158.5 million, or $0.69 per share compared to prior year of $111.6 million or $0.54 per share.

Adjusted Net Yield improved 18.2% (20.2% on a Constant Currency basis) mainly due to the addition of the Oceania Cruises and Regent Seven Seas Cruises brands which occurred in the fourth quarter of 2014.  On a Combined Company basis, which compares current results against the combined results of Norwegian and Prestige in the prior year, Adjusted Net Yield increased 1.5%, (3.2% on a Constant Currency basis), reflecting improved pricing in both ticket and onboard revenue in the quarter.  Adjusted Net Revenue in the period was $832.4 million compared to $595.7 million in 2014, an increase of 39.7% primarily as a result of the addition of the Oceania Cruises and Regent brands.

Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 21.1% (22.0% on a Constant Currency basis), primarily as a result of the Acquisition of Prestige, while on a Combined Company basis decreased 4.7% (4.0% on a Constant Currency basis), primarily due to the timing of certain expenses that will now occur in the second half of the year.  The Company’s fuel price per metric ton, net of hedges, decreased 10.3% to $558 from $622 in 2014.

Interest expense, net increased to $52.4 million from $31.9 million as a result of the incremental debt from the Acquisition of Prestige.  Other income (expense) was $(3.7) million, reflecting a non-recurring charge related to certain of the Company’s fuel derivatives, partially offset by the fair value increase related to a foreign exchange collar for the Seven Seas Explorer newbuild.  The charge related to fuel derivatives resulted from a shift in the original implementation timeline for the Company’s exhaust gas scrubber project. As a result of this shift, the Company changed the mix of its future fuel consumption, resulting in a dedesignation of the associated fuel hedges.

2015 guidance and sensitivities

In addition to the results for the second quarter, the Company also provided guidance for the third quarter and full year 2015, along with accompanying sensitivities.  Guidance for Adjusted Net Yield and Adjusted Net Cruise Cost Excluding Fuel per Capacity Day are provided on an as reported basis as well as a Combined Company basis, which compares expectations to 2014 results that include the results of Prestige assuming the acquisition had occurred at the beginning of 2014.

The strong booking environment that began with the 2015 wave season has continued into the second and third quarters with volumes continually outpacing the same time last year.  Looking to 2016, resurgence in Caribbean demand, combined with the strong booking environment, has resulted in 30% more booked revenue compared to the same time last year on a capacity increase of approximately 11%.

“Building on the strong results for the first half of the year, we are raising the midpoint of our 2015 full year earnings guidance,” said Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd.  “While still early in the 2016 booking cycle, we have seen strong demand across all three brands,” continued Beck.

As of June 30, 2015, the Company had hedged approximately 48%, 54%, 44% and 17% of its 2015, 2016, 2017 and 2018 projected metric tons of fuel purchases, respectively.  The average fuel price per metric ton of the hedge portfolio for the same periods is $478, $468, $409 and $384, respectively.

Future capital commitments consist of contracted commitments, including ship construction contracts, and future expected capital expenditures necessary for operations. As of June 30, 2015, anticipated capital expenditures were $1.0 billion for the remainder of 2015, and $0.9 billion and $1.1 billion for each of the years ending December 31, 2016 and 2017, respectively, of which we have export credit financing in place for the expenditures related to ship construction contracts of $0.7 billion for the remainder of 2015, $0.5 billion for 2016 and $0.6 billion for 2017.

Integration update

The integration efforts as a result of the Acquisition of Prestige are substantially complete.  The Company reiterates its 2015 gross synergy capture of $75 million, comprised of $30 million in revenue, $45 million in cost synergies, of which $20 million is earmarked for reinvestment in the year.  The Company has identified an incremental $10 million in synergies for full year 2016, bringing the gross synergy capture for 2016 to $125 million, of which $40 million will be reinvested into business initiatives to further drive demand to the Company’s three brands.

As part of the Acquisition of Prestige a contingent consideration of up to $50 million was payable upon achievement of certain 2015 Net Revenue targets. Based on the probability of achievement of the Net Revenue targets, the Company reversed the remaining contingent consideration liability of $34.3 million in the second quarter.

International business development update

A number of milestones supporting the Company’s international business development strategy are well underway, including the establishment of a sales and marketing center in Sydney, which will represent all three brands in Australia, New Zealand and the Pacific Islands.

The Company has substantially completed its study and assessment of entering the China-sourced market with dedicated vessels perhaps as early as 2017.  Accordingly, the Company expects to announce its decision sooner than the original spring 2016 timeframe.