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Genting Hong Kong acquires three more shipyards in Germany

  • Written by Kari Reinikainen

Alan Lam reporting

Genting Hong Kong, a leading global leisure, entertainment and hospitality group that operates three cruise brands, has just announced the acquisition of three shipyards - in Wismar, Warnemunde and Stralsund - from Nordic Yards for a total of €230.6 million.

The Asia based group is making huge strides into the highly consolidated cruise ship building sphere. This move came shortly after the acquisition of Lloyd Werft last year. It forms a part of Genting’s global fleet expansion and cruise business strategy.

“The rapid growth of the world cruise industry,” said Tan Sri Lim Kok Thay, Chairman and Chief Executive Officer, Genting Hong Kong, “especially in China, has led to cruise ship order book reaching an all-time high. In order to ensure that the company can build the required number of cruise ships in the next decade for our global fleet expansion, it is strategic that we acquired shipyards that can build our cruise ships in a timely basis and in a more cost effective manner.”

The three new yards and the previously acquired Lloyd Werft will come under the Lloyd Werft Group. It will effectively become another major European cruise ship builder. Having its own shipyards will free the company from both the delivery time constrains and pricing uncertainties associated with depending on other builders - most of whom have orderbook levels at a historic high at present - thus allowing the management to focus on other strategic aspects of the cruise business.

These shipyards are substantial in sizes, with covered drydocks and building halls: the Wismar shipyard’s drydock measures 340 metres long and 67 metres wide; the Warnemunde shipyard’s drydock measures 320 metres long and 54 metres wide, capable of building cruise ships bigger than the Oasis class; the Stralsund shipyard has a ship lift to launch cruise ships and megayachts up to 270 metres long. With further investment, these yards together will have a steel fabrication capacity of about 150,000 tons a year, sufficient to build a number of cruise ships and a megayachts annually.

“With all the yards situated in Germany,” continued Tan Sri Lim Kok Thay, “a country with a long tradition of efficiency in building high quality and innovative cruise ships and megayachts, the Lloyd Werft Group, with approximately 1,700 experienced management and workers, is well placed to succeed as one of the best cruise and megayacht ship building companies in the world. Germany is also where the largest cluster of marine equipment suppliers are located and has excellent government maritime coordination policies. The investment in the Lloyd Werft Group will have good returns from the 10-year planned orderbook, fits perfectly with the company’s global cruise strategy and is in the long-term interest of the Company.”

So the Genting story continues …

Wismar yard allows Genting to build large vessels

  • Written by Kari Reinikainen

The Wismar shipyard that Genting Hong Kong, parent company of Star cruises and Crystal Cruises, allows the construction of very large vessels.

The three newly acquired shipyards feature covered drydocks and building halls, resulting in high labor productivity and completion quality as cruise ships can be constructed regardless of weather conditions.

“The Wismar shipyard’s drydock measures 340m long and 67m wide and the Warnemunde shipyard’s drydock measures 320m long and 54m wide and are capable of building cruise ships larger than the largest cruise ships currently afloat. The Stralsund shipyard has a ship lift to launch cruise ships and megayachts up to 270m long,” Genting Hong Kong said in a statement.

“These shipyards, with further investment, will have a steel fabrication capacity of about 150,000 tons a year, sufficient to build a number of cruise ships and a megayacht yearly,” it added.

Star Cruises is currently building two 150,000 gross ton vessels at Meyer Werft, while Lloyd Werft is to construct three 100,000 gross ton ships for Crystal Cruises.

“With all the yards situated in Germany, a country with a long tradition of efficiency in building high quality and innovative cruise ships and megayachts, the Lloyd Werft Group, with approximately 1,700 experienced management and workers, is well placed to succeed as one of the best cruise and megayacht shipbuilding companies in the world. Germany is also where the largest cluster of marine equipment suppliers are located and has excellent Government maritime coordination policies,” said Tan Sri Lim Kok Thay.

“The investment in the Lloyd Werft Group will have good returns from the 10 year planned order book, fits perfectly with the Company’s global cruise strategy and is in the long term interest of the Company”

Hurtigruten ends partnership with CLIA

  • Written by Kari Reinikainen

Alan Lam reporting

Hurtigruten, the Norway-based adventure cruise operator, has announced that it will not renew its current membership with CLIA.

It appears that the decision has been made based on the perception by the Norwegian cruise line that its interest has diverged from that of CLIA. The company has also made it clear that this move is in no way indicative of its view of CLIA as an organisation. “We are very supportive of the good work undertaken by CLIA for the cruise industry,” said Anthony Daniels, Hurtigruten’s head of sales. “However, as a business, Hurtigruten has ambitions to be seen more as an adventure travel business than a mainstream cruise line.”

With this in mind it has decided that it is “the right time to part company with CLIA”.

"We have enjoyed working with the team at Hurtigruten and would like to thank them for their support,” said Any Harmer, Vice-President of Operations, CLIA Europe. “Hurtigruten is a very unique brand and we understand the desire of the company to reposition itself within the holiday sector.”

Norwegian forecasts 2016 EPS to rise to $3.65-$3.85 from $2.88 in 2015

  • Written by Kari Reinikainen

Norwegian Cruise Line Holdings, Ltd, the world’s third largest cruise shipping group, forecasts its full year 2016 adjusted earnings per share (EPS) to reach $3.65 to $3.85 compared to $2.88 in 2015, which was close to the ceiling of its $2.90 ceiling.

Net yields should rise 3.35% as reported and $4.0% in constant currency terms this year, while net cruise costs are expected to increase by 2.25% as reported and by 2.50% on constant currency basis.

“As a result of its post-acquisition strategies to drive demand, the Company entered the year in a solid booked position with more than 50% of overall 2016 inventory sold which is significantly ahead of the same time last year. The Company is seeing this trend continue into next year where the current booked position for the first half of 2017 is approximately 30% higher compared to this time last year on a capacity increase of approximately 5%,” Norwegian said in a statement.

"Our strong booked position coming into the year provides us more pricing leverage during Wave season and beyond for remaining inventory than in years past," said Frank Del Rio, President and CEO.

"Our core itineraries in the Caribbean, Alaska and Bermuda are performing strongly and more than make up for softness in the Mediterranean region caused by geopolitical events and incidents in recent months which, when combined with the strengthening of the U.S. dollar, reduced anticipated earnings for the year by approximately $0.10 per share. The strength in our North American destinations, as well as encouraging booking volumes for early 2017 give us further confidence in our targets of reaching double-digit return on invested capital in 2016, growing to 14% by 2018, and exceeding $5.00 Adjusted EPS in 2017," continued Del Rio.

Norwegian reports solid improvement in final quarter and full year 2015 results

  • Written by Kari Reinikainen

Norwegian Cruise Line Holdings, the world’s third largest cruise shipping group, has reported a solid improvement in its final quarter and full year 2015 results.

Group net profit amounted to $38.2 million in the fourth quarter of last year, compared to a loss of $25.6 million a year earlier. Revenues rose to $1.03 billion from $788.9 million.

“Constant Currency Adjusted Net Yield on a Combined Company basis increased 7.4% (5.9% as reported), driven primarily by strong growth in pricing from same fleet operations as well as a partial quarter benefit from the addition of Norwegian Escape. Adjusted Net Yield on a Constant Currency basis increased 16.9% (15.2% as reported),” the company said in a statement.

For the full year 2015, Norwegian reported a net profit of $427.1 million, up from $338.4 million in 2014. Revenues rose to $4.35 billion from $3.13 billion.

“Increase in Constant Currency Adjusted Net Yield on a Combined Company basis of 3.7% (2.0%, as reported), driven primarily by strong pricing performance from same fleet operations. Adjusted Net Yield increased 20.0% on a Constant Currency basis (18.0% as reported),” Norwegian said, adding that a 9% adjusted return on invested capital exceeded weighted average cost of capital.

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CBR 3/2015 contents

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