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Carnival Corp & plc 2013 financial year net income rises to $1.2 billion

Carnival Corporation & plc has announced full year 2014 U.S. GAAP net income of $1.2 billion, or $1.59 diluted EPS, which included unrealized losses (non-cash) on fuel derivatives of $268 million and $20 million of net charges.

Full year 2013 U.S. GAAP net income was $1.1 billion, or $1.39 diluted EPS, which included net unrealized gains (non-cash) on fuel derivatives of $36 million and impairments and other charges of $190 million.

Revenues for the full year 2014 were $15.9 billion compared to $15.5 billion for the prior year. Cash from operations for the full year 2014 totaled $3.4 billion compared to $2.8 billion in 2013.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “Full year earnings were significantly higher than the prior year primarily due to strong profit improvement at both our Carnival Cruise Lines and Costa Cruises brands. We enjoyed some early wins from our collaboration efforts that contributed to our improved results, particularly for onboard revenues. We worked hard to contain costs and achieved an almost five percent reduction in fuel consumption for the year as we continue to implement energy conservation measures. We also made a number of strategic decisions in fleet investments that will position us well for the future.”

Commenting on the fourth quarter Donald stated, “Last quarter operating profit more than doubled due to higher ticket prices and onboard spending combined with lower costs, also exceeding previous guidance.” During the quarter, the Carnival Cruise Lines brand achieved a significant increase in revenue yields despite a highly competitive environment in the Caribbean. Additionally, Costa’s Asia operations achieved double-digit revenue yield improvement on a capacity increase in that region.

New ship introductions during the quarter generated substantial media coverage and positive buzz including the star-studded North American debut of Regal Princess which featured a reunion of the Love Boat cast and numerous guest stars who appeared on the hit TV show, as well as the delivery of Costa Diadema at a stunning and festive inaugural in Genoa, Italy. The company also recently placed orders with Italian shipbuilder Fincantieri for three innovative new ships for its Carnival Cruise Lines, Holland America Line and Seabourn brands to be delivered in 2018. In addition, the company recently sold three of its smaller vessels – Costa Celebration, Grand Holiday and Ocean Princess.

Fincantieri wins Carnival Cruise Lines, Holland America Line orders

Fincantieri, the Italian shipbuilder, said it has been awarded an order by Carnival Corporation & plc for the construction of two new cruise ships for Carnival Cruise Line and Holland America Line.

Both will be sisters ships respectively to Carnival Vista and Koningsdam, both currently under construction at Fincantieri shipyards.

The Carnival Cruise Lines' ship, the 26th unit in line’s fleet, with a gross tonnage of 133,500 will have capacity for 3,954 passengers and will enter service in the spring 2018. The Holland America Line ship, a second Pinnacle class unit, will have a gross tonnage of 99,500 and accommodation for 2,650 passengers and will be delivered in autumn 2018, the company said in a statement.

CBR Odo Commentary – Opening of Cuba to US cruising could have far reaching implications

The opening of Cuba for cruise passengers from the US could have far reaching consequences for the cruise industry in the region.

On Wednesday, the US and Cuba agreed to restore diplomatic ties for the first time since 1961 and the US agreed to ease travel restrictions between the two countries. However, it was not immediately known what this would mean in practice.

We think the cruise industry would be a major beneficiary from lifting of all travel restrictions currently imposed by the US government on its citizens.

Cuba’s tourism infrastructure would be unlikely to be able to cope with an influx of large numbers of Americans wishing to visit the country. Cruise ships would be able to overcome this be offering itineraries with overnight stays; Cuba is located only some 90 miles south of Florida, which would allow this on even short duration itineraries.

Cuba is virtually the only island in the Caribbean that can offer city destinations to visiting tourists, which could broaden the appeal of the region.

The introduction of Scandinavian style cruise ferries that carry passengers in good quality accommodations and their vehicles plus roro freight, could also be on the cards.

It is possible that the availability of berthing facilties in major locations, such as Havana, could pose some problems to cruise lines should the demand for cruises thsat visit Cuba reach a high level in a short period of time, which we think could be the case.

The opening of Cuba would, quite likely, have a negative impact of cruise tourism in the Bahamas as many lines would probably replace Nassau with Havana on their itineraries.

US, Cuba restore diplomatic ties, travel restrictions eased, cruise shipping shares gain

The US and Cuba have agreed to restore diplomatic ties, which sent shares in listed cruise shipping groups sharply higher. However, it is not yet known what promised easing of travel restrictions would mean in practice.

The United States and Cuba agreed on Wednesday to restore diplomatic ties that Washington severed more than 50 years ago, and President Barack Obama called for an end to the long economic embargo against its old Cold War enemy, the Reuters news agency reported yesterday.

“Travel restrictions that make it hard for most Americans to visit will be eased, but the door will not yet be open for broad U.S. tourism on the Caribbean island,” Reuters said.

“Obama's announcement also will not end the U.S. trade embargo that has been in force for more than 50 years. That is codified in legislation and needs congressional approval. Obama said he would seek that approval but likely faces a struggle,” the news agency stated.

However, it was not immediately clear what the warming of relations between the two countries that are separated only by 90 miles of sea would mean in practice.

Shares in listed cruise shipping companies, however, rose sharply on the news. Norwegian Cruise Line Holdings gained 4.57% to close at $45.76, Carnival Corp rose 3.46% to $44.61 in New York, while Carnival plc in London firmed 1.1% to finish trading at £28.01. Royal Caribbean Cruises Ltd (RCCL) rallied 6.62% to $81.54 and 0.7% to NOK585.0 in Oslo. The news came late in the day in Europe, which explains the smaller gains in European listed shares than those quoted in the US.

Christine Duffy named President of Carnival Cruise Lines

Carnival Corporation & plc., the world's largest travel and leisure company, today announced that Christine Duffy has been named president of Carnival Cruise Lines, with 24 ships, making it the largest of Carnival Corporation's nine distinct cruise brands.

Duffy, currently president and CEO of Cruise Lines International Association (CLIA), will assume the role on Feb. 1, reporting to Arnold Donald, CEO of Carnival Corporation & plc.

"Christine is one of the most respected and dynamic leaders in the travel industry," said Donald. "She brings a wealth of experience to Carnival Cruise Line that will help the cruise line continue to deliver unmatched vacation experiences to millions of guests each year."

Duffy has more than 30 years of experience in the travel industry and started her career as a travel agent in Philadelphia at McGettigan Partners. As CEO of CLIA, the leading trade association of the cruise industry, she led many advancements including the globalization of cruise industry associations around the world to create a unified voice promoting cruising to key stakeholders from policy makers to consumers through CLIA's more than 13,000 travel agency members representing over 50,000 travel agents.

In this role, Duffy successfully engaged member cruise lines and industry stakeholders to support CLIA's expansion into new and emerging markets around the world. Before assuming her role with CLIA in 2010, she served as president and CEO of Maritz Travel, the largest corporate meeting, incentive and event companies in the world from 2004-2010.

"This is a tremendous opportunity for me to be part of a dynamic organization with a long history of innovation and industry firsts," said Duffy. "The name Carnival is truly synonymous with cruising and I look forward to joining this talented team to continue the tradition of excellence that has made Carnival Cruise Line one of the top cruise lines in the world."

Duffy serves on various travel industry boards including U.S. Travel Association (USTA), the advisory board for Starwood Hotels, and the Board of Directors for Visit Florida.  In 2001, she founded Meeting Professionals International's Women's Leadership Initiative, which delivered research and programs to help women in the industry advance in their careers. She also is a member of The Committee of 200, an organization of the world's most successful women business leaders that supports, celebrates and advances women's leadership in business and works to ensure that women will continue to take on more significant and visible leadership roles.  

The St. Louis Business Journal recognized her as one of the 25 Most Influential Business Women. Corporate Meetings and Incentives chose her as one of the "Top 10 Women Leaders in the Meeting Industry," and Meetings News magazine named her four separate times as one of the "25 Most Influential People in the Meetings Industry."

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