Carnival Corporation & plc cuts loss as CEO calls Wave Season phenomenal

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Written by Kari Reinikainen Kari Reinikainen

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Published: 27 March 2023 27 March 2023

 

 

Carnival Corporation & plc, the world’s largest cruise shipping group, has slashed its operating and net losses in the first quarter of its financial year as its CEO the company is enjoying “phenomenal” wave season.

Net loss in three months to 28 February narrowed to $693 million from $1,891 million in the same period year earlier, while operating loss (EBIT) narrowed to $172 million from $1,491 million. Revenues increased to $4,432 million from $1,632 million.

Josh Weinstein commented, CEO, said in a statement: "In the first quarter, we outperformed our guidance on all measures. We achieved record first quarter net per diems, exceeding the high end of our guidance, driven by improving ticket prices and sustained growth in onboard revenue, while delivering an additional seven points of occupancy on higher capacity compared to the prior quarter." (See "Non-GAAP Financial Measures" below)

Weinstein continued: "We are enjoying a phenomenal wave season, achieving our highest ever quarterly booking volumes and breaking records in both North America and Europe. Our strong performance has extended into March and we expect this favourable trend to continue based on the success of our efforts to drive demand."

Weinstein added: "We remain focused on executing our overarching strategy of driving net yield growth, while maintaining our industry-leading cost base. With adjusted free cash flow for the year expected to be positive, our revolver renewal behind us, more committed export credit financings in hand, a reduced capex profile going forward and over $8 billion of liquidity, we believe we are well positioned to pay down near term debt maturities from excess liquidity and therefore have no intention to sell equity (except in connection with our advantageous and non-dilutive stock swap program)."

First Quarter 2023 Results and Statistical Information

First quarter 2023 results exceeded the company's guidance due to stronger pricing and onboard spending, higher occupancy and favorable timing of operating costs.

• Adjusted EBITDA (see "Non-GAAP Financial Measures" below) for the first quarter of 2023 was $382 million, better than the December guidance range of $250 million to $350 million, despite a $31 million unfavorable impact from fuel price and currency rates since December guidance.
• Continuing to close the gap to a strong 2019:
• Revenue in the first quarter of 2023 was $4.4 billion, representing 95% of 2019 levels. This was better than the fourth quarter of 2022, which was 80% of 2019 levels, an improvement of 15 percentage points.
• Occupancy in the first quarter of 2023 was 91%, higher than December guidance. Occupancy increased by seven percentage points compared to the prior quarter, on higher capacity.
• Cruise costs per available lower berth day ("ALBD") increased 3.3% as compared to the first quarter of 2019.
• In constant currency, adjusted cruise costs excluding fuel per ALBD (see "Non-GAAP Financial Measures" below) increased 5.9% compared to the first quarter of 2019, continuing its sequential quarterly improvement and better than the December guidance of up to 6.5% to 7.5%. Costs remain higher as compared to 2019 as a result of higher advertising investments to drive 2023 revenue as well as partially mitigating the impacts of a high inflation environment.
• Total customer deposits reached a first quarter record of $5.7 billion (as of February 28, 2023), surpassing the previous first quarter record of $4.9 billion (as of February 28, 2019) by 16%, driven by strong demand, bundled package offerings and pre-cruise sales.

Bookings

Weinstein noted:”We are well booked for the remainder of the year at higher prices (normalized for FCCs), which coupled with continued strength in onboard revenue, supports our improving outlook for the remainder of the year. We expect the extension of booking lead times, combined with our investment in advertising, to position us even better in 2024 and beyond."

The company is very encouraged with the improving demand environment, kicked off by an early start to wave season (peak booking period) on very strong Black Friday and Cyber Monday booking volumes. The company experienced the highest booking volumes for all future sailings for any quarter in its history. Both the company's NAA and Europe segments broke records, contributing to the company's record-breaking quarter. Consistent with previous comments, during the first quarter of 2023 the company continued its increased advertising activities, supporting its booking volumes.

The booking window has continued to return to historical patterns, providing further confidence in the continued strengthening of the demand environment and facilitating improving revenue yields over time. The company's NAA segment's booking curve mirrored peak 2019 levels, while the company's Europe segment continued to see an extension of its booking curve, which is over 80% recovered compared to 2019 levels.

The company's cumulative advanced booked position for the remainder of 2023 is at higher ticket prices in constant currency, normalized for future cruise credits ("FCCs"), as compared to strong 2019 pricing and a booked occupancy position that is solidly in the higher end of the historical range. (The company's current booking trends are compared to booking trends for 2019 as it is the most recent full year of guest cruise operations.)

TUI Cruises sets up Destinations unit for Mein Schiff brand

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Written by Kari Reinikainen Kari Reinikainen

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Published: 27 March 2023 27 March 2023

 

TUI Cruises, a joint venture between TUI AG and Royal Caribbean Group, said it would set up a Destinations department for its contemporary market Mein Schiff brand, effective immediately.

“Responsible for this change are Dennis Tetzlaff, Vice President Fleet Operations & Newbuild, and Denis Wiechert, Vice President Product Management & Guest Experience. They developed the newly structured Destinations department with the clear aim to achieve strategic operational and financial targets for its Tour Operations; hence, both departments will coordinate closely in joint task groups,” TUI Cruises said in a statement.

The newly formed Destinations department would be led by Marcus Puttich, who has recently been promoted to Director Destinations, answering for all operational, planning, sourcing and development aspects of Port Operations (both brands Mein Schiff and Hapag-Lloyd Cruises), Tour Operations and Ground Operations (only Mein Schiff).

Marcus Puttich reports directly to Dennis Tetzlaff, since 2022 Vice President Fleet Operations & Newbuild for TUI Cruises’ shared services (Mein Schiff and Hapag-Lloyd Cruises), overseeing Newbuild, Medical & Public Health, Destinations, Nautical and Emergency Response. Maria Tauschke, Head of Shore Operations, assumes additional operational responsibilities for Tour Operations (Mein Schiff) in addition to Port Operations and Ground Operations while reporting directly to Marcus Puttich.

Jointly with the Mein Schiff Product Management department, the best shoreside experience will be created. Accordingly, Carolin Bauer, Head of On-Board Commerce Management within the Mein Schiff Product Management, assumes additional responsibilities for revenue and yield management of the brand‘s Tour Operations, including product development and so called “active tours” (i.e. bike and hiking).

 

She will be reporting directly to Nina Krüger, Director Product Management & Hotel Operations. Nina Krüger again reports directly to Denis Wiechert, since 2021 Vice President Product Management & Guest Experiences for TUI Cruises’ Mein Schiff brand, overseeing Product Management & Hotel Operations, Entertainment and Onboard Marketing.

 

Both Dennis Tetzlaff and Denis Wiechert report directly to CEO Wybcke Meier. The changes reflect TUI Cruises’ sustainable growth with currently three more cruise vessels on order for its Mein Schiff brand through 2026 and will give the cruise line a more engagement-focused commitment towards destinations and an advanced emphasis on the tour operations product delivery.

TUI AG to launch  €1.8 billion rights issue

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Written by Kari Reinikainen Kari Reinikainen

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Published: 27 March 2023 27 March 2023

 

TUI AG, the German tour operator that has a significant footprint in the cruise industry, said it woild launch a €1.8 billion rights issue.

A total of 328,910,448 new ordinary registered shares with no par value of the company would be offered at a subscription ratio of 8:3 (8 New Shares for 3 existing shares). The subscription price of €5.55 per New Share represents a discount to TERP (theoretical ex-rights price) of approx. 39.85%, TUI said in a statement.

Alexey A. Mordashov – or any connected person or entity that indirectly holds 30.91% in the Company via Unifirm Limited and Severgroup LLC - are subject to a loss of rights as a result of far-reaching sanctions and under German securities law. “The Major Shareholder Sanctioned Persons or Entities can therefore not participate in the Rights Issue and no subscription rights will be granted to them,” TUI said.

Canadian shipbuilder Davie in talks to acquire Helsinki Shipyard's assets

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Written by Kari Reinikainen Kari Reinikainen

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Published: 27 March 2023 27 March 2023

Chantier Davie Canada Inc. has announced the exercise of its exclusive option to purchase the assets of Helsinki Shipyard Oy, the Finnish builder of expedition cruise ships and icebreakers, Davie said in a statement.

“Exercising the option to purchase does not mean an acquisition is completed. It is subject to the successful execution of thorough due diligence, including financial, regulatory and legal considerations, as well as final decision making by Davie,” the company said. 

Davie President and CEO, James Davies, said: “If the acquisition is successful, it would combine two historic and highly complementary businesses creating the western world’s leading international centre of excellence for Arctic shipbuilding.”

The ongoing process is otherwise confidential, and Davie will make further comment only upon reaching a major milestone such as the signing of a purchase agreement, the company said.

Helsinki Shipyard is in the process of completing the third and final expedition cruise ship for Swan Hellenic, based in Cyprus.

Based in Québec, Canada and founded in 1825, Davie is a leading builder and maintainer of specialist, mission-critical ships such as icebreakers, warships and ferries for government and commercial customers. Davie is Canada’s largest and highest capacity shipbuilder as well as a partner in the country’s National Shipbuilding Strategy under which it will build a fleet of advanced, fuel-efficient polar icebreakers and hybrid ferries, it noted.

Helsinki Shipyard in currently owned by a Cyprus based company that again is owned by two Russian businessmen. Neither the shipyard nor its owners face sanctions as a result of the Russian attack on Ukraine.