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RCCL forecasts 2018 EPS to rise to $8.55 to $8.75 range on strong US, European demand 

  • Written by Kari Reinikainen

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, said its booked position for 2018 is better than last year's record high and at higher rates.

“North American and European consumers continue to drive strong demand for all of our main products. These trends, coupled with strong onboard spend and a positive outlook for our Asia Pacific products, are positioning the company for a ninth consecutive year of yield growth,” the company said in a statement.

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company estimates 2018 Adjusted EPS will be in the range of $8.55 to $8.75 per share. The corresponding figure for 2017 was $7.53

“We are also very excited about the 2018 introduction of both Symphony of the Seas and Azamara Pursuit in Europe, in April and August respectively, and the introduction of Celebrity Edge in Fort Lauderdale in November. These new ships will be important contributors to 2018yield growth,” RCCL said.

The company expects a net yield increase in the range of 1.5% to 3.5% on a constant currency basis and 2.75% to 4.75% on an as reported basis for the full year.

"Our yields are increasing on top of an exceptional 6.4% Net Yield growth experienced in 2017," said Jason T. Liberty, executive vice president and CFO. "This is quite extraordinary and a testament to the strength in the demand for cruising and our brands," he added.

Net cruise costs excluding fuel are expected to rise 1.5% to 2.0% on a constant currency and 2.0% to 2.5% on an as reported basis.

RCCL hits Double-Double target as 2017 net profit hits record 1.63 billion

  • Written by Kari Reinikainen

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, said it had hit its Double-Double performance targets as it reported 2017 net profit of $1.63 billion, a new record.

In the final quarter of last year, the profit rose to $288.0 million from $281.0 million a year earlier, while operating profit (EBIT) increased to $307.3 million from $296.8 million and revenues reached $2.00 billion from $1.90 billion.

In the full year 2017, net profit rose to $1.63 billion from $1.28 billion in the year before. Operating profit rose to $1.74 billion from 1.48 billion and revenues increased to $8.78 billion from $8.49 billion. Adjusted earnings per share for the full year came at $7.53 per share — beating the Double-Double EPS target and the mid-point of previous guidance by $0.75 and $0.16, respectively,’ the company said in a statement.

The Double-Double programme was announced in July 2014, with an aim double the company’s 2014 earnings per share by 2017 and increase return on invested capital to double digits.

"Our teams worked hard to achieve the Double-Double goals and now they have done it", said Richard D. Fain, chairman and CEO. "Each of the brands performed excellently during the past year raising their guest satisfaction and employee engagement scores to new heights. This augurs well as we focus on our previously announced 20/20 Vision," he added. A combination of strong demand for our North American and European products as well as our onboard offerings drove the growth rate, RCCL said.

Key metrics of the full year 2017 results:

Gross Yields were up 5.7% on a Constant-Currency basis (up 5.9% As-Reported).

Net Yields were up 6.4% on a Constant-Currency basis (up 6.5% As-Reported).

Gross Cruise Costs per APCD increased 1.9% on a Constant-Currency and As-Reported basis.


Net Cruise Costs ("NCC") excluding Fuel per APCD were up 2.0% on a Constant-Currency and As-Reported basis.



UK investor Duke Street buys German river cruise operator A-ROSA

  • Written by Kari Reinikainen

 Duke Street, the London based mid-market private equity group, has agreed to acquire A-ROSA, the German upmarket river cruise operator, from Waterland Private Equity, a German company. The consideration has not been disclosed, the buyer said in a statement.

A-ROSA is a market leader in the premium segment for river cruises on Europe’s Danube, Rhine/Main/Moselle, Rhône/Saône and Seine rivers. The company was established in 2001 as a subsidiary of P&O Princess Cruises and was originally developed as the river cruise complement to AIDA ocean cruises. Based in the northern German city of Rostock and in Chur, Switzerland, A-ROSA has approximately 600 employees and operates a fleet of 11 high quality vessels. More than 85,000 passengers travelled on board A-ROSA cruises in 2017.

The company has, to date, enjoyed a very strong following in its German home market, as well as growing positions in other consumer markets, including the UK. Benefitting from a growing base of affluent older consumers, the river cruise segment performed strongly in the last economic downturn. The A-ROSA brand is highly regarded, with a modern, innovative river cruise fleet and exclusive agreements with key travel agencies. The high quality of on-board food and drink, cabin design and entertainment has encouraged significant levels of repeat bookings. The river cruise market is expected to benefit further from product development, loyalty-based marketing and a reduction in the average age of cruise holidaymakers.

Commenting on the A-ROSA investment, Charlie Troup, Duke Street Managing Partner, said: “We have identified in A-ROSA an exciting opportunity to back the leader in a growing segment of the European leisure market. The management team, led by CEO Jörg Eichler and COO Markus Zoepke, has built a strong consumer proposition for seasoned cruise passengers and new cruisers alike. Waterland has helped the team since 2009 to develop an excellent platform for further growth and we are delighted to be part of the next phase of A-ROSA’s success.”

Jörg Eichler, CEO of A-ROSA, added: “Duke Street moved very quickly in building a solid understanding of our business in a short space of time and have shown real determination to deliver a transaction that allows us to unlock the growth potential to take A-ROSA to the next level. We look forward to working together with the Duke Street team to develop and grow our business over the next years.”

Given the very strong ongoing consumer demand for the company’s offering, the opportunity exists for Duke Street both to expand A-ROSA’s fleet size and launch its product onto new rivers, while increasing its exposure to source markets outside Germany. Growing awareness of the convenience of visiting iconic European cities from a relaxed floating base is expected to sustain growth in the river cruise market and A-ROSA’s penetration of further key consumer economies on the continent. The transaction is subject to approval by antitrust authorities.


Australia's TT-Line to build new 'Spirits' in Flensburger

  • Written by Teijo Niemelä

TT-Line Company Pty Ltd and German shipbuilder Flensburger Schiffbau-Gesellschaft GmbH & Co. KG (FSG) have signed a letter of intent for the construction of two new ships to replace the current Spirit of Tasmania vessels.

TT-Line chairman Mike Grainger said the companies would now commence contract negotiations and agree to final design specifications.

“FSG was endorsed by the Board after the company short listed a number of international shipyards to build the new tailor-made vessels,” he said.

“As previously announced, we expect to place an order for the new vessels in the first half of the 2018 calendar year and for them to be delivered in time to commence operations on Bass Strait in 2021.”
FSG is a highly respected and experienced ship builder that has constructed more than 750 vessels since it was established in 1872.

It is currently building cruise ferries for Irish Ferries and Brittany Ferries as well as RoRo vessels for the Siem Group. The company has also recently designed and built RoPax ferries for Canadian BC Ferries and Scottish Caledonian MacBrayne.

Rüdiger Fuchs, CEO of FSG, said: "We are very happy and proud to be appointed as TT- Lines preferred shipbuilder for the build of their two next generation passenger ferries."

The TT-Line Board and the executive team of the company worked closely with the Tasmanian Government on vessel replacement through the Ships Replacement Sub- Committee of Cabinet, chaired by the Minister for Infrastructure, Rene Hidding, and including Premier Will Hodgman and Treasurer Peter Gutwein.

Norwegian Cruise Line Holdings reorganizes its Asia Pacific operations

  • Written by Teijo Niemelä

Norwegian Cruise Line Holdings Ltd. has announced enhancements to the organizational structure of its Asia Pacific operations that will enable it to further leverage the extensive corporate resources and expertise already in place in the region and continue to strengthen its presence in the Chinese cruise market.

Steve Odell, Senior Vice President & Managing Director Asia Pacific, has expanded his role to include the Company’s China operations along with the greater Asia Pacific region. Alex (Yucheng) Xiang has been promoted to Managing Director of the Company’s China operations, reporting to Odell. David Herrera, previously President of the Company’s China operations and based in Shanghai, will relocate back to Miami as Senior Vice President of Strategy and Corporate Development.

Since establishing the Company’s offices in Shanghai and Beijing in 2015 and working closely with travel partners and government officials, Herrera has positioned the Company for long-term success in China. Under Herrera¹s leadership, the team successfully launched the first Norwegian Cruise Line ship based in China, Norwegian Joy, in 2017. With an established local team, a ship purpose-built for the Chinese cruise market and a commitment to delivering on Norwegian Cruise Line’s ‘First Class at Sea’ promise, Herrera and his team achieved the fastest growth of any market for the Company in 2017. Carrying this momentum forward, Norwegian Joy will sail its first full year in the market in 2018, essentially doubling the Company’s capacity in the region. As he takes on this new role, Herrera will report directly to Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.

“In his expansive new role, David will preside over our global corporate initiatives from our headquarters in Miami,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “Since our announcement to enter the Chinese cruise market, David has led our local efforts and has positioned us for continued growth. We are thrilled with what he and the team have achieved in China and look forward to further success in this market.”

As part of this new organizational structure, Alex (Yucheng) Xiang, has been promoted to Managing Director of the Company’s China operations and will serve as the first senior officer in the region. Xiang has been with the China team since day one as Vice President of Sales and has played a critical role in the region’s success to date. His promotion is effective February 2, when he will assume leadership of the dedicated teams in Shanghai and Beijing. Prior to joining the Company, he held a number of senior executive roles in sales, marketing and business development, including Deputy General Manager, Sales & Marketing in China for Royal Caribbean Cruise Service (China) Co. Ltd.

“We are thrilled to have someone of Alex’s caliber to lead our operations in China,” said Harry Sommer, Executive Vice President, International Business Development for Norwegian Cruise Line Holdings Ltd. “I have worked closely with Alex since he joined the team, and he has been an integral part of every success we have achieved. I have full confidence that Alex will continue the great work David started in the region and continue to lead our China team from one success to the next.”

Steve Odell will take on an expanded role overseeing the greater Asia Pacific region, including China. Odell joined the Company in October 2015 to spearhead the launch of the Company’s Asia Pacific headquarters in Sydney, bringing with him 30 years of cruise industry experience, 17 of those in Asia. In his expanded role, he is responsible for the strategic expansion, vision and continued growth of the Company’s presence in the fast growing Asia Pacific market. He is currently Chairman of CLIA Australasia and a founding board member of the Asia Cruise Association. Odell will continue to report to Harry Sommer.