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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.

Ovation of the Seas to become second Quantum class ship based in China

Royal Caribbean International, the contemporary market unit in the Royal Caribbean Cruises Ltd. (RCCL) group, says it will based Ovation of the Seas in China, where it will join Quantum of the Seas, the lead ship of the three strong class.

"Furthering the cruise line’s commitment to growing the China vacation market, Royal Caribbean International today announced that Tianjin, China, will be the new home for its third Quantum-class ship, Ovation of the Seas," the company said in a statement. The news was given today by Royal Caribbean’s President and CEO, Michael Bayley, in a Beijing press conference of media, travel agents and officials. Launching in April 2016, Ovation of the Seas will be the cruise line’s fifth cruise ship based in the region.

“Cruising has become very popular for Chinese consumers and Royal Caribbean is already capturing their imaginations with our industry-leading cruise ships,” said Bayley. “We are furthering our commitment by bringing two of the world’s newest and most advanced Quantum-class cruise ships to the region. In addition, we are significantly expanding our investment in the training and employment of Chinese talent so they can join us in delivering our amazing and distinctive vacations to Chinese travelers.”

Currently under construction, Ovation of the Seas will join Quantum of the Seas, Mariner of the Seas, Voyager of the Seas and Legend of the Seas in the China seas. The five ships will comprise the largest fleet deployment for any cruise brand in China, homeporting in four metropolitan Chinese cities – Shanghai, Tianjin, Hong Kong and Xiamen – and primarily sailing three- to 12-night itineraries to destinations in Japan, Korea, Taiwan and Vietnam. Royal Caribbean’s summer 2016 Asia adventures will open for booking in August 2015.

In addition to committing ships to the region, Royal Caribbean is investing in people shoreside. The cruise line created a curriculum with the Tianjin Maritime College in August 2014 in order to attract, train and employ more Chinese talent. In the 13,000 sq. ft. school, students are instructed in the skills needed for a successful culinary or restaurant service career with Royal Caribbean. The cruise line has already hired more than 3,000 graduates and hopes to expand the program to accept more students and work with colleges in other Chinese cities.

Royal Caribbean also is exploring new ways to engage the Chinese economy and help create more Chinese jobs. The cruise line is investigating potential Chinese drydock facilities to revitalize Legend of the Seas as early as 2018; logistics centers in China to supply its ships deployed in the region; and an inbound-tourism business model to bring thousands of North American vacationers to experience China.

Once launched, Ovation of the Seas’ maiden sailings will include a 52-night Global Odyssey from Southampton, U.K. to Tianjin. Vacationers can be among the first to experience the new ship on the 2016 Ovation Global Odyssey, which will open for sale on Thursday, March 26, 2015. Five itineraries will take guests to some of the world’s most iconic cities:

A seven-night England to Barcelona cruise, departing May 3, 2016 from Southampton
16-night Barcelona to Dubai cruise, via the Suez Canal, departing May 10
14-night India and Southeast Asia cruise, departing May 26 from Dubai to Singapore
Three-night Malaysia cruise, departing June 9 on a roundtrip sailing from Singapore
And 12-night Exotic Asia cruise, from Singapore to Tianjin.

Royal Caribbean is the leading and the most successful cruise line in China, shown by business growth, consumer and trade preference, and industry and consumer recognitions and awards. For its inaugural season, Ovation of the Seas will homeport in Tianjin – approximately 70 miles southeast of Beijing, while Quantum of the Seas will complete a full year of sailings from Shanghai. Mariner of the Seas will join Quantum of the Seas in Shanghai, while Voyager of the Seas will sail regularly from Hong Kong’s new Kai Tak Cruise Port. In addition to Japan and Korea itineraries, Voyager of the Seas will offer four- and five-night Taiwan and Vietnam cruises. For its part, Legend of the Seas will offer a set of sailings from Tianjin and then reposition to its new homeport of Xiamen for the remainder of the season.

“While China gets the newest Quantum Class, North America is getting the newest Oasis Class, Harmony of the Seas. There will be three Oasis-class ships sailing from two Florida ports starting in 2016, in addition to Anthem of the Seas from Cape Liberty, giving vacationers plenty of options for a truly memorable Royal Caribbean cruise.” added Bayley.

Ovation of the Seas, Anthem of the Seas and Quantum of the Seas are among the Quantum Class, the world’s most advanced cruise ships. While Quantum of the Seas and Ovation of the Sea will sail the China seas, Anthem of the Seas will make Cape Liberty in Bayonne, N.J. its long-term home, and offer New York metropolitan vacationers a range of Bermuda, Caribbean, and Canada and New England adventures, the company said.

Renderings of Virgin Cruises' planned newbuildings surface on Internet

virgin-cruises

Two renderings of the planned two newbuildings of Virgin Cruises, the new cruise shipping unit of Sir Richard Branson's Virgin Group business empire, have surfaced on the internet.

The first one of images, posted on cruisecurrents.com, shows a large vessel with a red hull and forward part of the superstructure built entirely of glass plus X-form bow, which curves backwards rather than forwards in order to improve seakeeping qualities.

The second picture shows a vessel from the stern. The superstructure is split in two, as in the Oasis class vessels of Royal Caribbean International. Near the stern, as part of an outdoor arena, there is a large sky diving simulator, which rises to the height of the superstructure. Neither rendering is dated nor do they provide any additional information.