The Lloyd Werft Design Center was ceremonially opened today at Bremerhaven, Germany. The new facility will allow the shipyard to more effectively produce the design work required by the extensive order book it has acquired, primarily from Crystal Cruises, since the yard was bought by Genting last year.
Housed in Lloyd Werft former administrative building – originally built as a laundry for the North German Lloyd – the new center will fully operational on 30th May of this year. Currently, Lloyd Werft employs circa 90 designers, and there simply wasn't enough space for all of them in the existing design facility, especially as the workforce is expected to grow to 150 by the end of the year, Benedikt Brinkmann, head of design and engineering at Lloyd Werft told Cruise Business Review. In total, 250 people can be employed in the facility.
At the moment, the main customer for the Lloyd Werft Design Center is Crystal Cruises, with the Center participating in both the interior and exterior design of Crystal's new river and ocean cruise ships, working alongside Crystal Cruises' own design team. According to Brinkmann, the contracts from companies in the Genting Group currently fill the yard's order book completely, and therefore there are no plans to build cruise ships for other clients.
Lindblad Expeditions Holdings, the New York based company which operates expedition cruises and holidays, has announced that it has acquired 80.1% of the outstanding common stock of Natural Habitat, Inc. a leading adventure travel and ecotourism company based in Boulder, Colorado.
Natural Habitat was previously owned by Gaiam, Inc. a leading brand focused on wellness and fitness, and Ben Bressler, Natural Habitat's Founder and President. Bressler will retain an ownership interest of 19.9% in Nat Hab and will continue as President of the new Lindblad subsidiary. The transaction is expected to be accretive to earnings per share, exclusive of any purchase accounting adjustments.
The purchase price for the 80.1% interest in Natural Habitat was approximately $20 million and was financed through a combination of cash on hand ($14.85 million), Lindblad stock ($2.65 million, or 264,208 shares) and a note (approximately $2.5 million). Gaiam's 51% ownership interest in Natural Habitat was acquired for cash, while the shares acquired from Bressler were purchased through a combination of cash, Lindblad stock and a note. Bressler's remaining 19.9% interest is subject to an arrangement providing for put/call rights that generally cannot be exercised, with certain exceptions, until 2020.
Natural Habitat is a leading adventure travel and ecotourism company with a focus on responsible land-based travel. Adventures include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galapagos tours and African safaris. Natural Habitat offers eco-conscious expeditions from Antarctica to Zambia with a multitude of adventures in between.
Since 2003, Natural Habitat has partnered with World Wildlife Fund ("WWF") to offer conservation travel, sustainable travel that directly protects nature. As part of this transaction, WWF extended the end date of this agreement from December 31, 2018 to December 31, 2023.
The acquisition of Nat Hab provides Lindblad a platform for expansion into land-based offerings with a partner that has a strong, trusted and complementary brand and a shared focus on nature and conservation. Lindblad expects to market its ship-based trips to Natural Habitat's customer database while simultaneously marketing Natural Habitat's offerings to its own customer database, expanding the market reach of both businesses.
For the year ended December 31, 2015, Natural Habitat realized net revenues of approximately $41 million, EBITDA of approximately $3.7 million and net income of approximately $1.5 million.
In response to interest from clients in the fast-growing expedition cruise market, Damen has teamed up with Expedition Voyage Consultants Ltd. to develop a specialist Damen cruise ship, with capacity for around 100 passengers. The cruise ship combines Expedition Voyage Consultants’ unmatched operational experience with Damen’s shipbuilding excellence, providing unforgettable experiences in luxury travel to destinations from Polynesia to the Northwest Passage.
Henk Grunstra, Damen Product Director says: “This expedition ship will be a significant advance in the market, making it possible for expedition companies to deliver their customers the best expedition experience. This ship will be able to offer innovative and exciting itineraries with a higher level of safety, economy and comfort. Capable of visiting virtually any destination, the design will offer cruise lines the option of including activities such as helicopter operations and submersible diving alongside traditional small boat landings and watersports. Innovative design features for smooth operations and an immersive guest experience will be incorporated from the experience of Expedition Voyage Consultants.”
The move is driven by the fast growing expedition cruise sector, which has seen unprecedented expansion into remote destinations. Mr. Grunstra explains, “Expedition cruising requires small, comfortable and highly capable vessels that customers can be confident in, no matter if they are cruising Polynesia or the Northwest Passage. With the existing tonnage aging and environmental regulations tightening, it is important that operators have vessels they can rely on well into the future.”
This partnership follows a successful cooperation with Expedition Voyage Consultants’ sister company, EYOS Expeditions, which resulted in Damen developing the world’s first Polar Code compliant expedition yacht – the SeaXplorer.
Ben Lyons, Chief Executive Officer of Expedition Voyage Consultants Ltd. and EYOS Expeditions says: “This vessel will be capable of taking expedition cruise passengers beyond the usual range in terms of both geography and experience. The vessel’s high ice capability and endurance make her globally capable, and she will be equally at home in the tropics or polar waters. She is designed to be a multi-functional platform equipped with all of the tools an operator might need.”
Expedition Voyage Consultants Ltd. will infuse the design with the lessons learned during their team’s collectives 100+ years of experience in the expedition cruise business. During that time, the team has sailed aboard a wide range of commercial expedition vessels ranging from icebreakers to luxury cruise ships.
“An expedition vessel should be able to reach remote destinations safely and deliver a super experience in often challenging conditions. Because the ship’s design effects the experience of the guests, whether that be how quickly they can reach shore or how safely operations can be run in all types of weather, capability matters.”
“We’ll take our collective experience, gained from a wide variety of vessels, and apply the best features we’ve seen to this design. Combining that operational knowledge with Damen’s expertise will create a highly functional and reliable vessel purpose built for expedition cruising, and it is very exciting to be able to incorporate these operational elements into the design from the first line,” explains Mr. Lyons.
Mr. Grunstra adds, “This partnership brings two industry leaders together; Damen has unparalleled experience from building over 5500 vessels, including complex vessels such as passenger ships, offshore patrol vessels, sail training vessels and superyachts. EVC has decades of expedition knowledge operating voyages from the polar regions to the remotest tropical islands. Combining this will create an exceptional product.”
Royal Caribbean Cruises Ltd. today reported first quarter results and increased its outlook for the full year. Continuing on its Double-Double trajectory, the company's Adjusted first quarter earnings were $0.57 per share – nearly tripling last year's results and almost doubling previously provided guidance. The company increased its full year earnings guidance by $0.25 per share to $6.15 to $6.35.
Results for the first quarter 2016:
– Net Yields were up 7.0% on a Constant-Currency basis (up 3.4% As-Reported), 300 basis points better than guidance. Strong close-in demand on Caribbean sailings and better onboard revenue drove the improvement. – Net Cruise Costs ("NCC") excluding fuel increased 4.7% on a Constant-Currency basis (up 3.6% As-Reported), which was in line with guidance. – Adjusted Net Income was $124.0 million or $0.57 per share, versus $45.2 million, or $0.20 per share in 2015. – US GAAP Net Income was $99.1 million or $0.46 per share, versus $45.2 million or $0.20 per share in 2015.
Full year 2016:
– Overall, the company's booked position remains strong, similar to last year's record high levels. – Adjusted EPS is expected to be in the range of $6.15 to $6.35 per share – $0.25 higher than previous guidance. The increase is mainly driven by strength in North American products and onboard revenue trends as well as stronger foreign currencies. – Net Yields are expected to increase 2.5% to 4.0% on a Constant-Currency basis (up 1.3% to 2.8% As-Reported). – NCC excluding fuel are expected to be up approximately 1.0% on a Constant-Currency basis (up 1.0% or less As-Reported).
The company continues to implement its $500 million share repurchase program. Since the program was announced in October 2015, the company has repurchased $450 million worth of shares.
"What an exciting quarter in an exciting year," said Richard D. Fain, chairman and chief executive officer. "Our brands continue to excel and produce gratifying results. This year's performance further solidifies our base for the Double-Double."
First quarter results
Adjusted Net Income for the first quarter of 2016 was $124.0 million, or $0.57 per share, compared to Adjusted Net Income of $45.2 million, or $0.20 per share, in the first quarter of 2015. Strong close-in demand for the Caribbean combined with better than expected onboard spend in beverage and internet drove the majority of the outperformance. Foreign exchange and fuel contributed $0.08 to the upside.
US GAAP Net Income for the first quarter 2016 was $99.1 million or $0.46 per share compared to $45.2 million or $0.20 per share in 2015. As previously announced, the company eliminated the two-month reporting lag related to their Pullmantur brand in the first quarter. This resulted in a one-time catch up of approximately $0.10 loss per share which, as previously discussed, has been removed from key statistics for 2016.
Net Yields on a Constant-Currency basis increased 7.0% during the quarter. Constant-Currency NCC excluding fuel increased 4.7%. Bunker pricing net of hedging for the first quarter was $511 per metric ton and consumption was 344,000 metric tons.
Full year 2016
The company has updated full year Adjusted EPS guidance to a range of $6.15 to $6.35 from $5.90 to $6.10. Foreign exchange net of fuel is contributing approximately $0.15 to full year earnings.
The company's booked position is similar to last year's record levels. However, China is a closer-in booking environment making it harder to compare positions. Excluding China bookings, the company's booked position is well ahead of last year's.
Constant-Currency Net Yields are expected to be in the range of up 2.5% to 4.0%. Strong first quarter revenue results, combined with strong demand trends for North American products is more than offsetting weaker demand for Mediterranean sailings from the North American consumer.
"The first quarter has given our year momentum, which is more than offsetting some headwinds from the Mediterranean," said Jason T. Liberty, chief financial officer. "This performance is positioning us for the highest earnings in company history."
Net Cruise Costs excluding fuel are expected to be up approximately 1.0% on a Constant-Currency basis.
Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2016 guidance for Adjusted EPS to be in the range of $6.15 to $6.35 per share.
Second quarter 2016
Constant-Currency Net Yields are expected to increase approximately 1.0% in the second quarter of 2016. Various customary factors skew comparisons between quarters such as an early Easter shifting Holy Week sailings into the first quarter in 2016 and the timing of new ship deliveries. NCC excluding fuel are expected to be up approximately 2.0% on a Constant-Currency basis. Based on current fuel pricing, interest rates and currency exchange rates, the company expects second quarter Adjusted EPS will be approximately $1.00 per share.
As it continues the most significant brand portfolio expansion in luxury travel and hospitality history, Crystal Cruises is also expanding its executive bench power. The line today announced the appointment of longtime luxury cruise industry executive Christian Sauleau as its new senior vice president of operations and total guest satisfaction, and will report directly to Thomas Mazloum, Crystal’s chief operating officer. In this newly created position, Sauleau will oversee Crystal’s departments of marine, hotel, food & beverage, entertainment and land programs. He will also manage safety and security operations, as well as officer and crew hiring processes and development, with the goal of maintaining the line’s long-celebrated standard of excellence and guest satisfaction ratings.
“Christian Sauleau’s esteemed career boasts a wealth of industry savvy – much of it gleaned from working in direct competition with Crystal – as well as experience in launching new ships and innovative enrichment programs,” says Crystal’s president and CEO, Edie Rodriguez. “We are thrilled he has agreed to join us as we continue to grow and encounter bigger opportunities and guest offerings than ever before, as our guests’ satisfaction remains paramount.”
Mazloum adds, “With more than 25 years in the luxury cruise industry, most of that time spent as a senior executive of operations, Sauleau brings to the Crystal family an affinity for delivering award-winning experiences and services, things for which Crystal has also been recognized for more than 25 years.”
In his prior roles, he has overseen the construction and launch of several luxury ships and facilitating innovative partnerships and onboard offerings with the likes of the prestigious Le Cordon bleu culinary school in Paris and with renowned chef Paul Bocuse. His other successes have included a partnership with Jean-Michel Cousteau’s Ocean Futures Society to offer the Ambassadors of the Environment program for young travelers.
In his new position with Crystal, he will support the line’s ocean cruises, as well as Crystal Yacht Cruises, Crystal River Cruises and Crystal Exclusive Class ships. A native of France, Sauleau will be working closely with Crystal’s teams in its Los Angeles headquarters and Miami branch office.