International AD Gif CruiseBanner banner-ANIMATION

Ongoing improvement in cruise industry fundamentals - Carnival's Donald

Carnival Corp & plc President and CEO Arnold Donald says the the cruise industry's fundamentals continue to improve.

He noted in a statement: “We are experiencing an ongoing improvement in underlying fundamentals based on our successful initiatives to drive demand. Our efforts to further elevate our guest experience are clearly resonating with consumers and, notably, improving the frequency and retention of our loyal guests.”

At this time, cumulative advance bookings for the remainder of 2015 are ahead of the prior year at higher prices. Since January, booking volumes for the remainder of the year are running in line with last year’s historically high levels at higher prices.

Donald added, “We are also seeing results from our ongoing public relations efforts and creative marketing campaign designed to attract new to cruise. Our multifaceted campaign built around the Super Bowl garnered 5 billion media impressions before the commercial aired and has exceeded 10 billion impressions to date.”

Donald also noted that the recent delivery of Britannia of P&O Cruises, at 143,760 gross tons the largest cruise ship built for Britain and named by Her Majesty Queen Elizabeth II, drew international acclaim and showcased cruising on a global scale.

Carnival forecasts strong yield rise, but warns of strong dollar

Carnival Corp & plc, the Anglo-American cruise shipping giant, says it expects yields to rise much more than anticipated in December, but warns that a firmer dollar will have a negative impact.

Based on current booking strength, the company expects full year 2015 net revenue yields to increase 3% to 4% on a constant currency basis, which excludes translation and transactional currency impacts, compared to the prior year. "This is one full (percentage) point better than December guidance on a constant currency basis," Carnival said.

On a constant dollar basis, which does not exclude the unfavourable transactional impact of currency, the company still expects yields to be approximately 2% higher than the prior year. The company expects net cruise costs excluding fuel per ALBD for full year 2015 to be up 2% to 3% percent compared to the prior year on a constant dollar basis, which is better than December guidance of up 3% due primarily to the favorable transactional currency impact.

Since December, unfavourable changes in currency exchange rates (constant currency) have reduced full year 2015 earnings expectations by $219 million, or $0.28 per share. However, this impact has been significantly offset by the improvement in the company’s operating performance, resulting in just a $0.05 reduction to the midpoint of December guidance.

Taking the above factors into consideration, the company forecasts full year 2015 non-GAAP diluted earnings per share to be in the range of $2.30 to $2.50, compared to 2014 non-GAAP diluted earnings of $1.93 per share.

Looking forward, Donald stated, “Consistent with many global companies, the strengthening of the U.S. dollar has hampered our full year earnings expectations, masking the 3% to 4% (constant currency) yield increase our collective brands are expecting to achieve. Our successful initiatives to drive both ticket and onboard revenue yields have improved our financial performance and we remain on track toward our goal of achieving double-digit return on invested capital in the next three to four years.”

Carnival reports strong first quarter as Carnival Cruise Line and Costa in Asia shine

Carnival Corporation & plc, the world's largest cruise shipping group, has reported strong figures for the first quarter of its financial year as yields rose markedly, driven by the group's US focused Carnival Cruise Line contemporary market brand and Costa Crociere;s Asian business.

Group net profit in three months to 28 February amounted to $49 million, compared to a loss of $20 million in the same period a year earlier. Operating profit (EBIT) rose to $266 million from $67 million, although revenues declined to $3.53 billion from $3.58 billion.

President and Chief Executive Officer Arnold Donald noted in a statement: "The year is off to a strong start achieving significantly higher earnings than the prior year and our previous guidance. Our onboard revenue initiatives drove particularly strong improvement in the first quarter with onboard yields more than 8% higher than prior year (constant dollar).”

Donald also noted that the Carnival Cruise Line brand continued to outperform, achieving significant revenue yield growth and remains on track for a strong year. Additionally, Costa’s Asia operations achieved double-digit revenue yield growth, affirming the pent-up demand in the region and building confidence in the long-term potential for growth.

Key metrics for the first quarter 2015 compared to first quarter 2014 were as follows:

On a constant dollar basis, net revenue yields (net revenue per available lower berth day or “ALBD”) increased 2.0% for 1Q 2015, which was better than the company’s December guidance of flat to up 1.0%. Gross revenue yields decreased 3.1% in current dollars due to changes in currency exchange rates.

Net cruise costs excluding fuel per ALBD increased 2.4% in constantdollars primarily due to higher dry-dock costs and advertising expenses. Costs were lower than December guidance, up 5.5% to 6.5%, substantially all due to the timing of expenses between quarters. "Gross cruise costs including fuel per ALBD in current dollars declined 9.6% due to changes in fuel prices and currency exchange rates," the company said.

Fuel prices declined 38% to $406 per metric ton for 1Q 2015 from $654 per metric ton in 1Q 2014.
Fuel consumption per ALBD decreased 3.7% in 1Q 2015 compared to the prior year.
Changes in currency exchange rates reduced earnings by $0.06 per share (constant currency).


Carnival group, Meyer Werft and Fincantieri in nine ship agreement

Carnival Corporation & plc, the world's largest cruise shipping company, today signed two strategic memorandums of agreement that will add a total of nine new cruise ships to the company's fleet over a four-year period from 2019 - 2022. Details of the vessels and to which brands they would be allocated will be disclosed later, but the company said they would serve the North America, European and Chinese markets.

"The shipbuilding agreements, which include options for additional ship builds in the coming years, are subject to several conditions, including satisfactory financing," the Anglo-American company said in a statement.

Italian shipbuilder Fincantieri S.p.A and German shipbuilder Meyer Werft will each build ships based on Carnival group's next-generation ship designs, which will produce the most efficient ships in the company's history. "The new ships are expected to serve established cruise markets in North America and Europe, as well as newer markets, including China. Each new ship will be specifically designed and developed for the brand and guests it will serve, and support the company's overall goal of exceeding guest expectations and further elevating every aspect of the guest experience," Carnival said.

"We're excited to take this next step in our fleet enhancement plan with these two new agreements that are consistent with our long-term strategy of measured capacity growth over time," said Arnold Donald, president and CEO of Carnival Corporation & plc. "Our goal as a company is to exceed the expectations of every guest on every ship every day, and these new ships will further enable us to do just that. These will be the most efficient ships we have ever built and the great guest experience will create even more excitement around cruising – helping new cruisers realize the superior vacation experience and value that cruising offers versus land-based vacations."

Fincantieri, the world's largest cruise ship building company, will develop and construct five ships at its shipyards in Monfalcone and Marghera, Italy.

"I am extremely proud on this truly memorable day for us. Today's announcement provides us with a long-term strategic prospective, and reinforces the extraordinary partnership between us and Carnival Corporation, developed over time thanks to the confidence the group has always shown in us, which we assure will be once again well placed," said Giuseppe Bono, CEO of Fincantieri. "This agreement reflects the exceptional business vision of the world's most important cruise operator, and our readiness and flexibility in interpreting its demands."

Bono added, "This agreement is the best reward for our hard work over all these years, and in fact, our organizational, design and production skills have allowed us to consolidate our market leadership, confirming us at the top of such an exclusive and complex industry."

Meyer Werft, a leading global shipbuilder founded in Germany in 1795, will build its four ships at its shipyards in Papenburg, Germany, and Turku, Finland. Now in its seventh generation of family ownership, Meyer Werft has become well known for constructing large, modern and sophisticated cruise ships, including 39 luxury ships the company has built for its customers around the world.

Bernard Meyer, managing partner of Meyer Werft, said, "We are very happy and honored that Carnival Corporation trusts our strength to bring this ambitious newbuilding program to life in Turku and Papenburg."

As part of each company's long-term strategic partnership with Carnival Corporation & plc, additional new ship orders are being explored over the coming decade.

Additional information on Carnival group's cruise ship design, and which of the company's nine leading global brands will add these next-generation vessels to their fleets will be made available at a later date.

Deutschland sold to undisclosed US buyer, to retain name

Deutschland, the sole remaining vessel of the failed Peter Dreilmann Kreuzfahrten company in Germany, has been sold to an undisclosed US buyer, who intends to return the vessel to service and to retain its name, the administrator of MS „Deutschland“ Beteiligungsgesellschaft, the failed company that owned the ship, said in a statement.

The buyer has paid an instalment of the purchase price, which has not been disclosed, and would settle the rest by the end of May, said Reinhold Schmid-Sperber, lawyer at Reimers Rechtsanwalte, the German law firm that has acted as administrator of the previous owner of the ship.

The buyer has experience in the international cruise industry and it intends to return the ship to service under its present name and to retain most of the crew that has been employed on the vessel.

Deilmann, which had operated the ship on charter from its owner, ran into financial difficulties last year and subsequently collapsed. German media reports say the vessel has liens and liabilities that amount to €60 million and it is not known whether the sale price of the 1998 built, 22,496 gross ton ship would cover these.

Deutschland is the only major deep sea passenger vessel that flies the German flag. Deilmann attempted to switch the ship under the Maltese flag before its collapse to reduce costs. It is not known whether the ship would retain the German flag under the new ownership.