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Norwegian Cruise Line Holdings Ltd. announces Chief Executive Officer direct reports

Norwegian Cruise Line Holdings Ltd. yesterday announced executive appointments reporting directly to President and Chief Executive Officer Frank J. Del Rio.

The new appointments are:

– Bob Binder, President of International Operations

– Howard Sherman, Executive Vice President, Revenue Management

– Robin Lindsay, Executive Vice President, Vessel Operations  

– Victor Gonzalez, Executive Vice President, Supply Chain and Logistics Management

– Harry Sommer, Senior Vice President and Chief Integration Officer

Drew Madsen and Jason Montague will continue as President and Chief Operating Officers of Norwegian Cruise Line (Madsen) and Oceania Cruises / Regent Seven Seas Cruises (Montague). Wendy Beck will continue in her role as Executive Vice President and Chief Financial Officer with additional responsibilities for support services.

“Norwegian Cruise Line Holdings is on an incredible growth trajectory. The Board of Directors and I have been working closely to fine-tune our vision for the future and how we can best channel the core competencies of our three great brands and the talents of our 30,000 team members,” said Del Rio.  “To that end, we have crafted an organizational structure with both centralized and brand-specific functions and selected seasoned leaders that will carry out that vision.”

SkySea Cruises to launch its maiden voyage in May from Qingdao

SkySea Cruises, the joint venture of Royal Caribbean Cruises Ltd. (RCCL) and China’s biggest online travel agent Ctrip, will launch its maiden voyage from the new cruise homeport in Qingdao. Alan Lam reports.

The launch will be a major event for both the port of Qingdao and SkySea Cruises. On 29 May the port will debut its new cruise homeport by sending off SkySea’s cruise vessel, Celebrity Century, on her maiden six-day Qingdao-Nagasaki-Fukuoka-Qingdao voyage. RCCL's Celebrity Cruises unt sold the 1995 built vessel to Ctrip last year. It is likely that the ship will be renamed, but this has not happened yet.

Three new cruise berths are currently under construction and upgrading in Qingdao, including one capable of hosting mega ships. A new International Passenger Centre will also be open to facilitate cruise operation.

In October last year, the port of Qingdao shut down its bulk cargo operations in the old port area in an effort to support the construction of new cruise homeport. Qingdao’s main cruise terminal was completed in March 2013; it has an annual passenger capacity of 1.5 million.

Costa Group strengthens organization

Michael Thamm, CEO of the Costa Group, today announced a number of changes to strengthen the leadership team and the company’s organizational structure.

Effective February 1st, 2015, the current Senior Vice President Hotel Operations & Product Development, Neil Palomba, will be appointed President of Costa Crociere, Genoa. He will be responsible for managing the Costa brand, as well as for the structure and design of products, sales and customer care at Europe’s leading cruise company.

Also effective February 1st, 2015, the company will appoint Buhdy Sin Bok, the current Senior Vice President Pacific Asia & China, as President of Costa Asia, Shanghai. This reflects the increasing importance of Asia for the Costa Group, especially the rapidly growing Chinese market in which Costa Asia is the market leader.

The two newly appointed presidents will, together with Michael Ungerer, who heads AIDA Cruises, report directly to the CEO of Costa Crociere S.p.A..

"I would like to congratulate Neil and Buhdy on their new positions and look forward to working with them intensively on the further expansion of our company. These appointments will help us strengthen our Costa and Costa Asia brands and support the development of our global activities, especially in Europe and Asia," says Michael Thamm.  

Development of a central Marine Operations Center for the Costa Group

A further organizational change announced today is the establishment of a central Marine Operations Center in Hamburg, Germany. Under the name Carnival Maritime, Costa Group is creating, with the support of Lufthansa Technik, a highly modern, digitalized unit for the operation of its fleet, currently numbering 25 ships. Carnival Maritime will be led by Jens Lassen, current Senior Vice President Marine Operations AIDA Cruises, who will also report directly to the CEO of Costa Group.

"The Hamburg location offers us excellent access to technology and expertise in the maritime sector. We are certain that the close cooperation with Lufthansa Technik will enable us to transfer airline know-how to improve continuously the quality of our fleet’s operations,” Thamm continues.

RCCL revises 2015 earnings per share forecast slightly higher to $4.65-$4.85

Royal Caribbean Cruises Ltd. (RCCL), the world's second largest cruise shipping group, said it has adjusted earnings per share (EPS) forecast for 2015 is expected to the range of $4.65 to $4.85 per share, which is slightly higher than previous guidance of $4.55. "Approximately $0.05 of the improvement is due to the combined effect of lower fuel costs offset by negative foreign exchange movements. The remainder of the difference is due to improved operational elements," the company said in a statement.

"Bookings over the past three months have been higher than prior year levels, and the company is experiencing a good, but typical WAVE season. Load factors and average per diems are both ahead of same time last year. In fact, the company’s booked position at the end of 2014 was the best such position in the company’s history," RCCL said.

The company continues to experience highly competitive Caribbean pricing through the first quarter, but pricing is expected to be up low single digits for the remainder of 2015. The company expects a Net Yield increase in the range of 2.5% to 4.5% on a Constant- Currency basis and in the range of down 0.5% to up 1.5% on an As-Reported basis for the full year.

NCC excluding fuel are expected to be up 1% or better on a Constant-Currency basis and down 1.5% to 0.5% on an As-Reported basis.

“On the revenue front, although the first quarter remains a challenge, we are pleased with the way our summer season in the Caribbean, Europe, China and Alaska is coming together,” said Jason T. Liberty, chief financial officer. “On the expense side, our on- going focus on driving efficiencies throughout the business provides us with the ability to keep our costs firmly in line with our Double-Double expectations while strategically investing in technology enhancements and growing markets, like China.”

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company currently estimates 2015 Adjusted EPS will be in the range of $4.65 to $4.85 per share. The company noted that since October, the fall in the price of oil has had a positive impact of $0.59 per share and the strengthening of the US Dollar has had a negative impact of $0.54 per share.

RCCL final quarter, full year 2014 net profit soar

Royal Caribbean Cruises Ltd. (RCCL), the world's second largest cruise shipping group, has reported a sharp increase in both final quarter and full year 2014 net profit.

Group net profit rose to $109.7 million in the fourth quarter of last year from $7.0 million a year earlier. Revenues decreased a fraction, to $1.82 billion from $1.85 billion. For the full year, the group net profit increased to $764.1 million from $473.9 million in 2013 as revenues rose to $8.07 billion from $7.59 billion.

In the final quarter, Net Yields on a Constant-Currency basis increased 2.7% versus guidance of 3.5%, driven by a weaker than anticipated Caribbean pricing environment.

"The strengthening of the US Dollar, net of fuel, reduced EPS by $0.07. Even though the worldwide price of crude oil dropped precipitously during the quarter, there is a lag between sharp movements in crude prices and the cost of fuel at-the-pump and bunker inventory on board our ships. Bunker pricing net of hedging for the fourth quarter was $660 per metric ton and consumption was 347,000 metric tons," RCCL said in a statement.

During the fourth quarter, tax reform in Spain eliminated limitations on the carry forward period for previously recognized net operating losses. This resulted in a net income benefit of $33.5 million, or $0.15 per share. This benefit had not been anticipated in the company’s guidance and, in accordance with the company’s past approach to such items, was excluded from Adjusted EPS.
Net Yields for the full year 2014 increased 2.4% on a Constant-Currency basis. Onboard revenue yields were up 3.8%.

Net cruise costs (NCC) excluding fuel were down 0.6% on a Constant-Currency basis, versus guidance of flat to slightly down. The average bunker price net of hedging for full year 2014 was $693 per metric ton and consumption was 1,367,000 metric tons.

Towards the end of 2014, the US Dollar strengthened while the price of fuel in world markets declined, but at a more dramatic rate. While the impact of currency is immediate, there is a lag before a change in the price of fuel flows through to the business. There continues to be a relationship between foreign exchange and fuel, but the offsets are not exact (especially in the short term) and fluctuations a near certainty. For 2014, the net impact of currency and fuel was a negative $0.07 to earnings relative to the latest guidance.

At the beginning of 2014, the company forecasted Adjusted Earnings of $3.20 to $3.40 per share. In the first and second quarter, foreign exchange moved in the company’s favor and the company increased the midpoint of its guidance to $3.45, largely to reflect that improvement. Later in the year, foreign exchange reversed direction, reversing the earlier benefit. The company’s final Adjusted EPS of $3.39 was at the top end of original guidance. Interestingly, foreign exchange movements netted to approximately zero by year-end.

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