United Caribbean Lines granted licence to operate ferry to Cuba
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- Written by Kari Reinikainen Kari Reinikainen
- Published: 12 May 2015 12 May 2015
As soon as the U.S. government having approved the re-establishment of ferry links with Cuba, the jostling for positions among the potential service providers began in earnest. Within days United Caribbean Lines (UCL) announced that it had been granted licence by the U.S. Department of the Treasury to operate ferry services between the U.S. and Cuba. Alan Lam reports.
UCL plans to start cruise ferry services from several of the main ports in Florida, including Miami, Tampa, Port Everglades, and Key West, using modern overnight tonnage designed for international services. The company will operate daily passenger services from autumn 2015 onwards under the guidelines of the current U.S. regulations for travelling to Cuba. Arrangements are being made with Cuban authorities.
The UCL plan also includes extending the links to Yucatán Peninsula in Mexico.
The other known contender is the Spanish ferry operator, Baleària, which has also applied for a licence to operate the same service.
Baleària has been operating ferry services in the Caribbean since 2011. It currently connects Fort Lauderdale with Freeport, using BAHAMAS MAMA (formerly ALHUCEMAS) under the Bahamas Express brand name. The route was previously served by the fast ferry PINAR DEL RÍO, which is still based in the region and it is likely to be deployed on a Cuban route should the licence be granted. The ship is already in possession of all the necessary certificates required by the U.S. Coast Guard according to Adolfo Utor, the company’s president.
Baleària initially has plans to operate two routes from the U.S. to Havana: one high-speed service from Key West and the other (probably conventional) from Port Everglades.
The company also plans to establish another link in the region this year, between Fort Lauderdale and Nassau.
Within the same region, Baleària’s “internationalization” strategy also has Puerto Rico and the Dominican Republic in its sight.
With the inclusion of Cuba, and possibly Mexico, the ferry business in the Caribbean is set to take off soon. The competition will be equally fierce.
RCCL orders fourth Quantum class unit; to be delivered in 2019
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- Written by Kari Reinikainen Kari Reinikainen
- Published: 08 May 2015 08 May 2015
Royal Caribbean Cruises Ltd. (RCCL), the world's second largest cruise shipping group, said it has entered into an agreement with Meyer Werft in Germany to order a fourth Quantum-class ship, which will be delivered in 2019.
Final contract is subject to e.g. financing.
“Today’s announcement is a reflection of the success of the first two Quantum-class ships,” said Richard D. Fain, Chairman and CEO, Royal Caribbean Cruises Ltd, said in a statement. “We have received a remarkable response from travel agent partners and travelers, and are thrilled that we’ll be able to deliver another revolutionary ship with our partners at Meyer Werft.”
“The fourth Quantum class vessel will be a trailblazer in smart-ship design and vacation innovation,” said Michael Bayley, President and CEO, Royal Caribbean International. “Royal Caribbean International is synonymous with adventure, and the icons and amenities on this ship will continue to challenge and expand guests’ expectations of the cruise experience.”
Based upon current ship orders, projected capital expenditures for full year 2015, 2016, 2017, 2018 and 2019 are $1.6 billion, $2.3 billion, $0.4 billion, $2.4 billion and $1.3 billion, respectively.
Capacity increases for 2015, 2016, 2017, 2018 and 2019 are expected to be 5.5%, 6.3%, 3.1%, 3.9% and 6.5%, respectively. These figures do not include potential ship sales or additions that the company may elect to make in the future.
Norwegian raises second quarter net yield guidance
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- Written by Kari Reinikainen Kari Reinikainen
- Published: 07 May 2015 07 May 2015
Norwegian Cruise Line Holdings, the world's third largest cruise shipping group, has raised its guidance for adjusted net yield increase in the second quarter.
The company now forecasts adjusted net yields to rise by 17.5% to 18.5% in the second quarter compared to an earlier fotrecast of a 17.0% to 18.0% rise on as-reported basis
“We are raising the midpoint of our guidance to take into account the better than anticipated interest expense and net yield performance in the first quarter,” said Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd, in a statement.
At the same time, Norwegian lowered its adjusted net cruise cost rise forecast to 23.0% to 24.0% from 27.0% to 28.0% earlier. Forecast for adjusted earnings per share was increased to $0.70 to $0.75 in the second quarter from an earlier forecast of a $0.20 to $0.24 increase.
“We are maintaining our net yield and net cruise cost guidance for the year as benefits from our incremental revenue synergies offset the anticipated foreign currency headwinds and the revenue impact from the unscheduled dry-dock of Norwegian Star. Further, the reinvestment of $20 million into demand-driving initiatives is offset by incremental cost synergies identified in the quarter,” continued Beck.
Norwegian guides full year adjusted net yields to rise by 17.0% and adjusted net cruise costs by 23.5% on as-reported basis. Earnings per share are forecast to reach $2.70 to $2.90, with no change to the previous forecast.
Norwegian almost doubles 2015 Prestige acquisition synergy forecast
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- Written by Kari Reinikainen Kari Reinikainen
- Published: 07 May 2015 07 May 2015
Norwegian Cruise Line Holdings, the world's third largest cruise shipping company, has increased its forecast for the synergy effects the acquisition of Prestige Cruise Holdings would generate this year to $75 million from $40 million.
"As a result of continued integration and synergy identification efforts, the Company has now identified $75 million in synergies for full year 2015, comprised of $30 million in revenue and $45 million in cost synergies," the company said in a statement.
"The company had previously communicated the identification of $15 million in revenue and $25 million in cost synergies for a total of $40 million for 2015. Of the incremental synergies, the Company is earmarking $20 million for reinvestment directed to business initiatives to further drive demand to the Company’s three brands, resulting in net synergies of $55 million for 2015," Norwegian said.
“The identification of additional synergies has come as the result of a truly collaborative effort between our dedicated integration team and all areas of the organisation,” said Frank Del Rio, president and chief executive officer, in the statement.
“Tasked with a mandate that synergies have a neutral or positive impact on the guest experience, the organisation has come together to identify meaningful incremental synergies. The net synergies will have an immediate impact on the bottom line in 2015, while amounts reinvested in our business initiatives will benefit our strategies for earnings growth in 2016 and beyond,” continued Del Rio.
For the full year 2016, the Company has identified synergies of $115 million which includes the annualization of initiatives introduced in 2015 coupled with new initiatives. Of these, the Company plans to reinvest $40 million, resulting in net synergies for the year of $75 million.
Norwegian group plunges to first quarter loss as commission, payroll costs soar
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- Written by Kari Reinikainen Kari Reinikainen
- Published: 07 May 2015 07 May 2015
Norwegian Cruise Line Holdings, the world's third largest cruise shipping group, has plunged to a loss in the first quarter of the year on sharp rises in both commission and payroll costs.
Group net loss amounted to $21.5 million compared to a profit of $51.3 million in the first quarter of 2014. Revenues increased sharply, to $938.1 million from $664 million, with the acquisition of Prestige Cruise Holdings in the second half of 2014 boosting the fresh figure.
“I am pleased to report strong earnings out of the gate for our first full quarter of operations following the combination of Norwegian and Prestige late last year,” Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. said in a statement “These results are even more impressive as they come against strong comparables in the prior year, particularly for the Norwegian brand, and headwinds from foreign currency exchange rates,” continued Del Rio.
For the first quarter of 2015, the Company generated stronger than expected adjusted earnings per share of $0.27 on Adjusted Net Income of $62.6 million. Earnings exceeded the Company’s guidance of $0.20 to $0.24 per share and benefited from lower than expected interest expense and better than anticipated Net Yield performance. On a GAAP basis, diluted loss per share and net loss were $0.10 and $21.5 million, respectively, primarily due to transaction and integration related costs.
Adjusted Net Yield improved 18.9% (or 19.9% on a Constant Currency basis) mainly due to the acquisition of the Oceania Cruises and Regent Seven Seas Cruises brands 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 was down 0.7% and essentially flat on a Constant Currency basis against a strong first quarter of 2014 that included the benefit of a one month charter of Norwegian Jade for the 2014 Winter Olympics.
Adjusted Net Revenue for the period increased 46.0% to $728.9 million as a result of the acquisition of the Oceania Cruises and Regent brands as well as approximately one month of incremental sailings from Norwegian Getaway which debuted in early 2014. Revenue in the period increased to $938.2 million from $664.0 million in 2014.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 28.7% (29.3% on a Constant Currency basis), primarily as a result of the Prestige acquisition, while on a Combined Company basis increased 5.6% (6.1% on a Constant Currency basis). The Company’s fuel price per metric ton decreased 18.2% to $526 from $643 in 2014.
The incremental debt from the acquisition drove an increase in interest expense, net to $51.0 million from $31.2 million; however, lower than anticipated interest rates resulted in expense that was lower than the Company’s guidance. Expense of $30.1 million in other income (expense) in 2015 was primarily attributable to a fair value adjustment on a foreign exchange collar for one of the Company’s newbuilds, Norwegian said.
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