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Norwegian raises floor of 2017 EPS guidance on accelerating rise of yields

  • Written by Kari Reinikainen

Norwegian Cruise Line Holdings Ltd, the world’s third largest cruise shipping company, has raised the floor of its guidance for result development for the full year on the back on an anticipated firming rise of net yoelds.

The company forecasts earnings per share (EPS) of $3.93 to $4.03 for the full year 2017 compared to a forecast of $3.79 to $4.03 the company made on 10 May, when it published its first quarter interims. EPS in the second quarter rose to $0.87 from $0.64 in the same period last year.

The company raised its guidance for rise in newt yields to 4.0% in as reported terms, an increase from a 2.255 rise on 10 may. Net cruise cosyts, meanwhile, should only rise by 1.75% this yerar, which is half a percentage point less than in the 10 May forecast.

“We are pleased to report strong booking trends across all markets for the back half of 2017 where pricing and occupancy are now up mid-single digits over prior year,” said Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd.

“Strong booking volumes and firm pricing have benefitted our booked business for the next four quarters, contributing to the increase of our 2017 full year outlook and further solidifying our expectation for strong earnings growth.”

 

Norwegian Cruise Line Holdings second quarter and first half profit jumps

  • Written by Kari Reinikainen

Norwegian Cruise Line Holdings Ltd, the world’s third largest cruise shipping company, has reported a fiorn rise in net and operating results for the second quarter and the first half on robust demand on key markets.

Net profit in the second quarter rose to $198 million from $145 million in the same period last year. Operating profit reached $275 million from $227 million and revenues rose to $1.34 billion from $1.19 billion.

In the first six months of the year, the net profit increased to $260 million from $218 million, while operating profit rose to $394 million from $358 million. Revenues rose to $2.49 billion from $2.26 billion in the first six months of last year.

“Positive consumer sentiment in North American and key international markets has resulted in a robust booking environment that continues to be one of the strongest in recent history which, combined with our targeted strategic revenue initiatives drove second quarter revenue and yield growth well above expectations,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.

“All three of our brands benefitted from strength across each of their respective markets and contributed to our second quarter earnings beat.”

Gross Cruise Cost increased 10.6% compared to 2016 due to an increase in total cruise operating expense and marketing, general and administrative expenses.

Gross Cruise Costs per Capacity Day increased 4.9%. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 2.7% on a Constant Currency basis and 2.6% on an as reported basis primarily due to an increase in marketing, general and administrative expenses partially offset by lower other cruise operating expenses. Fuel price per metric ton, net of hedges was $469, which is commensurate with prior year. The Company reported fuel expense of $86.7 million in the period.

Interest expense, net decreased to $64.2 million in 2017 from $68.4 million in 2016. Interest expense for 2017 reflects an increase in average debt balances outstanding primarily associated with the delivery of new ships and newbuild installments, as well as higher interest rates due to an increase in LIBOR. Interest expense for 2016 included a write-off of $11.4 million of deferred financing fees related to the refinancing of certain of our credit facilities in 2016.

Other net expense amounted to f $5.6 million in 2017 compared to an expense of $10.8 million in 2016. In 2017, the expense was primarily related to losses on foreign currency exchange of $8.1 million, partially offset by other income. In 2016, the expense was primarily related to unrealized and realised losses on fuel derivative hedge contracts and foreign exchange derivative contracts, partially offset by gains on foreign currency exchange.

Costa sells neoClassica, transfers Victoria back to Mediterranean

  • Written by Teijo Niemelä

Awaiting the arrival of new ships ordered for Costa Cruises and Costa Asia, the Italian company has decided to reposition Costa Victoria to the Mediterranean and to sell Costa neoClassica.

As of 30 march 2018 Costa Victoria will return to regular cruises in the Mediterranean. The ship has been operating mainly in China since 2012 offering cruises dedicated to the local market. During the summer 2018 she will offer a 7-night itinerary dedicated to the beaches and entertainment of the Balearic Islands, originally planned for Costa neoRiviera, with stops in Savona, Olbia, Minorca, Ibiza (overnight), Palma de Mallorca and Tarragona (overnight). The itinerary will offer guests the opportunity to enjoy the unique experience of PortAventura World, the largest destination resort in Europe with the Ferrari Land theme park.

The decision regarding Costa Victoria has been taken to maintain the offer in a highly popular region of the Mediterranean unchanged. Awaiting the arrival of four new ships starting from 2019, which will permit Costa Cruises to grow further in Europe and Asia (two ships are for the Costa Cruises market and two for Costa Asia), the Italian company has accelerated the renewal of its fleet, formalizing the sale of Costa neoClassica, one of its longest-serving ships. As of March 10 2018, once its schedule of cruises between India and the Maldives is complete, Costa neoClassica will no longer be part of the Costa fleet.

From June 2018, Costa neoRiviera will then replace Costa neoClassica, offering 7-night itineraries dedicated to the Greek islands, with Bari as the only home port.

Before returning to operate in the Mediterranean, Costa Victoria will perform scheduled dry-dock refurbishing works at the Chantier Naval de Marseille.

MV Werften delivers its first newbuild, Crystal Bach

  • Written by Teijo Niemelä

Today, on August 3, MV Werften delivered the Crystal Bach, the first of four identical 'Rhine Class ships to be built by the shipyard.

The 135-metre long and 11.4-metre wide Crystal Bach was designed for river cruising in Europe. Up to 106 passengers will sail along the Rhine, Danube and Main Rivers through the Netherlands, Belgium, Germany and Switzerland in 55 large suites, all designed to be above the water line with horizontal sliding windows.

Most of the public areas have floor to ceiling glass, providing a spectacular view of the surroundings and reminiscence of designs of new personal yachts. The Palm Court has a glass-domed ceiling, which will allow passengers to see the sky during daylight and the moon and stars in the evening. The luxury river yacht offers its passengers the award-winning Crystal service, including personal butler service and the world’s highest crew-to-guest ratio in the river cruise industry.

The ship also features all the favorite facilities of the Crystal brand such as three gourmet restaurants, a spacious spa and gym, a counter current swimming pool, electric bicycles, piano bar, bistro and other facilities.

"Today, we proudly hand over this exclusive ship,” announced Jarmo Laakso, Managing Director of MV Werften, during the ceremony. "The 'Crystal Bach' is the first newbuilding project to be completed under the MV Werften flag. Our employees have done wonderful work and proven that they can meet the highest quality standards."

Edie Rodriguez, CEO and President of Crystal Cruises, stated: "With the Crystal Bach we now welcome the second member of the Crystal River Cruises fleet. We would like to thank MV Werften for this wonderful ship. In the past months, we have had the pleasure of working with this shipyard as an experienced and reliable partner and look forward to our cooperation in the coming three projects."

"We have incorporated the best navigational and safety standards on ocean ships to the Crystal fleet of river ships with four Azimuth thrusters for easy maneuverability, forward bridge with two navigators seated at all time with state-of-the-art navigation system and had river ship training at the Simwave simulator center in Rotterdam," said Gustaf Gronberg, SVP of Newbuilding and Marine Operations.

The Crystal Mahler, the second ship in the line, will be delivered in a few weeks' time. Numbers three and four of the Rhine Class, the Crystal Debussy and the Crystal Ravel, have been under construction at MV Werften in Wismar since January. The keel-laying ceremony took place in May; delivery to Crystal River Cruises is scheduled for early 2018.

The production programme of MV Werften includes nine ships in the next five years. In addition to four river cruise vessels, three Crystal "Endeavor Class" yachts for Crystal Yacht Expedition Cruises and two cruise ships of the 204,000 gross tons Global Class for Genting Cruises in Asia.

Royal Caribbean reports second quarter earnings and increases full year guidance

  • Written by Teijo Niemelä

Royal Caribbean Cruises Ltd. has reported US GAAP and Adjusted Earnings per Share ("EPS") of $1.71 for the second quarter. This represents EPS growth of nearly 60% over same time last year. Better than anticipated performance in the second quarter combined with favorable booking trends are driving an increase in the Company's full year Adjusted EPS guidance to a range of $7.35 to $7.45.

Key highlights – second quarter 2017 results

– US GAAP and Adjusted Net Income was $369.5 million or $1.71 per share. Last year, US GAAP Net Income was $229.9 million or $1.06 per share and Adjusted Net Income was $235.2 million, or $1.09 per share in 2016.
– Gross Yields were up 10.2% on a Constant-Currency basis (up 8.7% As-Reported). Net Yields were up 11.5% on a Constant-Currency basis (up 9.9% As-Reported).
– Gross Cruise Costs increased 1.2% on a Constant-Currency basis (0.6% As-Reported). Net Cruise Costs ("NCC") Excluding Fuel were down 0.9% on a Constant-Currency basis (down 1.4% As-Reported).

Full year 2017 forecast

– Adjusted EPS is expected to be in the range of $7.35 to $7.45 per share.
– Net Yields are expected to increase 5.5% to 6.0% on a Constant-Currency basis, up approximately 6.0% on an As-Reported basis.
– NCC Excluding Fuel are expected to be up approximately 1.0% on a Constant-Currency and As-Reported basis.

"Our brands are executing beautifully, keeping the business in an exceptionally strong position," said Richard D. Fain, chairman and CEO. "Strong close-in demand for cruise bolstered the quarter, and we see further uplift for the balance of the year, positioning us well for the Double-Double and beyond."

Second quarter results

US GAAP and Adjusted Net Income for the second quarter 2017 was $369.5 million or $1.71 per share, compared to US GAAP Net Income of $229.9 million or $1.06 per share and Adjusted Net Income of $235.2 million, or $1.09 per share in 2016.

Gross Yields were up 10.2% on a Constant-Currency basis. Net Yields on a Constant-Currency basis increased 11.5%, exceeding prior guidance due to strong close-in demand driving higher pricing and occupancy.

Gross Cruise Costs increased 1.2% on a Constant-Currency basis. Constant-Currency NCC Excluding Fuel decreased 0.9%.

Bunker pricing net of hedging for the second quarter was $527 per metric ton and consumption was 324,000 metric tons.

Full year 2017

The company updated full year Adjusted EPS guidance to a range of $7.35 to $7.45, a $0.30 increase at the midpoint versus previous guidance. Bookings continue to be very robust.

The company's booked position for the remainder of 2017 continues to set new records. Looking further ahead, the company's booked position for the next twelve months is also strong, up on both rate and volume, versus the same time last year. Net Yields for the year on a Constant-Currency basis are expected to increase 5.5% to 6.0%, up relative to prior guidance due to the better results in the second quarter as well as stronger trends for the balance of the year.

NCC Excluding Fuel are expected to be up approximately 1.0% on a Constant-Currency basis for the year.

"Demand has remained strong, and we have captured the related revenue opportunity," said Jason T. Liberty, executive vice president and CFO. "These demand trends and continued cost discipline have resulted in the highest second quarter earnings in company history and have put us in position for another record year and achieving our Double-Double targets."

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2017 EPS to be in the range of $7.35 to $7.45 per share.

Third quarter 2017

Constant-Currency Net Yields are expected to be up 4.0% to 4.5% in the third quarter of 2017. Strong demand trends for Europe and North America products are driving improvement over an already strong previous year. NCC Excluding Fuel are expected to be up approximately 4.0% on a Constant-Currency basis.

Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects third quarter Adjusted EPS to be approximately $3.45 per share.

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