Top Headlines

Financing package structured for implementation of the MV Werften building programme

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 16 August 2019 16 August 2019

An international consortium led by KfW IPEX-Bank has structured a €2.6 billion financing package for two Global-class cruise ships following guarantees issued by the German Federal Government and the Federal State of Mecklenburg-Western Pomerania. This will strengthen the long-term development of MV Werften Group in Mecklenburg-Western Pomerania and Germany’s status as a shipbuilding nation.

MV Werften has more than doubled its workforce to about 3,000 in the last three years, creating over 1,600 additional industrial workplaces and taking on more than 300 new trainees. Its future as well as the national added value are secured in the long term with the financing package.

The Economics Minister of Mecklenburg-Western Pomerania, Harry Glawe, stated: "Genting Group is consistently following the course it has started and proving to be a reliable partner, actively fulfilling its promises. With the Global ships and other ship newbuilding projects of Genting Group, employment at MV Werften is safeguarded well into the next decade. New jobs can be created, and existing jobs secured locally, with value added at the yard locations being further increased. MV Werften is one of the most important employers in the region.” The German Federal Government and State of Mecklenburg-Western Pomerania are supporting the financing of the first two Global-class ships during construction with guarantees totalling €750m.

To support the long-term strategy of transforming MV Werften to be one of the most modern cruise shipyards, Genting Hong Kong has invested €300m in new investment programs that have already been largely implemented. Including the purchase price of the yards and start-up losses during three years of design and development, Genting has invested around €840m in MV Werften.

“In view of the shortage of shipbuilding slots for cruise ships in the next ten years, we made a conscious decision to invest in MV Werften in order to receive ships for our three cruise brands in good time,” explained Tan Sri Lim, Chairman and Chief Executive Officer of Genting Hong Kong Ltd. “We were impressed by the quality of the German shipyards’ workmanship and their network of thousands of experienced suppliers, subcontractors and workers in building cruise ships.”

KfW IPEX-Bank has worked with Genting Group for about 20 years. KfW IPEX-Bank has organised the overall financing for the Global-class ships in close cooperation with Genting since the latter’s acquisition of MV Werften three years ago. “KfW IPEX-Bank's structuring expertise has also proven to be extremely valuable in this transaction. The financing means additional momentum for MV Werften and the completion of the ships,” noted Chairman Tan Sri Lim Kok Thay.

Construction of the first Global-class ship is already well advanced. “We thank the Federal Government, the State of Mecklenburg-Western Pomerania and not least KfW IPEX-Bank for their confidence in us and their support. We are highly motivated in our work on the projects,” said Peter Fetten, CEO MV Werften.

About the financing package

The financing package comprises around €2.6 billion with a total investment volume of just under €3.1 billion. The structure will be backed by export credit guarantees of the Federal Republic of Germany and the Finnish export credit agency Finnvera, as well as by a guarantee from the state of Mecklenburg-Western Pomerania. It also benefits from the CIRR (Commercial Interest Reference Rate) for ships in accordance with the OECD consensus.

In addition to KfW IPEX-Bank the banking consortium includes BNP Paribas, Citibank, Crédit Agricole, Credit Suisse and DNB. A substantial portion of the loan amount will be further syndicated to more than 10 other German and international banks.

TUI AG’s cruise operations continued strong performance in third quarter

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 14 August 2019 14 August 2019

The cruise operations of TUI AG, the German travel company that is listed in London, continued their strong performance in the third quarter of the company/s financial year.

Turnover increased by 15.1% to €256.3 million in the quarter, year on, while underlying EBITDA rose by slightly less, at 14.4%, to €101.5 million.

“All three brands continue to deliver growth. In Q3 2019, all three cruise brands operated by the Group continued their growth roadmap and delivered a significant increase in their operating results. With the launch of Hanseatic Nature and Marella Explorer 2 in May 2019, TUI’s cruises fleet grew to a total of 17 ships,” the company said in a statement.

The average daily rate per passenger of TUI Cruises, of which the company owns 50% and which operates o the German market, fell by €10 to €190. Marella Cruises in the UK recorded an increase in the figure to £144 from £138, while the luxury and destinational brand Hapag-Lloyd Kreuzfahrten enjoyed a €13 increase in the daily rate, to €584.

In the first nine months of its financial year, TUI’s cruise operations increased their turnover by 9.9% to €680.9 million, while underlying EBITA grew significantly faster, at 14.0% to €182.4 million.

Carnival underperformed smaller peers in second quarter

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 12 August 2019 12 August 2019

Carnival Corporation & plc, the world’s largest cruise shipping group, reported a weaker development in operating and net income and net yields than its smaller peers, Royal Caribbean Cruises ltd (RCCL) and Norwegian Cruise Line Holdings (NCLH), figures released by the three companies show.

Carnival RCCL NCLH

Revenues $4,838 +11.0% $2,107 +20.6% $1,644 +9.3%

Operating income $515 -7.8% $573 +25.1% $309 +5.4%

Net income $451 -19.6% $473 +1.3% $227 +5.7%

All above dollar figures in millions, change compared to second quarter of 2018. Carnival group's financial year begins on 01 December.

Net yield $169.5 -2.6% $211.3 -1.2% $272.2 -0.01%

Net cruise costs $101.5 -4.0% $107.9 -0.9% $150.0 -0.01%

Net cruise costs excluding fuel

Operating income

in per cent of revenues 10.6% 28.4% 18.7%

Carnival was the only one of the three to report a fall in both operating and net income. Its operating margin, net income as percent of revenues, was also the lowest of three majors, calculations made by CruiseBusiness.com show.

Ponant plans to acquire Paul Gauguin Cruises

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 09 August 2019 09 August 2019

Ponant, the world leader of luxury expeditions to locations that only small ships can navigate, has announced its plan to acquire Paul Gauguin Cruises, the renowned specialist in sailings to exotic ports in French Polynesia and the South Pacific. Like Ponant, Paul Gauguin combines exceptional itineraries with luxury hotel services and fine cuisine to create memorable experiences at sea. Following the acquisition, the two cruise lines will keep their management, Diane Moore acting as CEO of Paul Gauguin Cruises with her team still based in Bellevue, WA and Navin Sawhney acting as CEO Americas of Ponant, based in New York.

“We are pleased to welcome Paul Gauguin Cruises to our Ponant family,” noted Jean-Emmanuel Sauvée, Founder and President of Ponant. “Our guests can now select from a wider range of iconic destinations and become enriched by cultural and expedition cruises of their choice, that literally travel to the ends of the earth from the most remote ports to more perennial favorites, on our combined fleet of small ships. We share the same core values. The synergy between our operations makes this the perfect collaboration while preserving the unique DNA of both brand experiences.”

Speaking for Paul Gauguin Cruises, Richard Bailey, Chairman, observed, “With this strategic alliance we look forward to delivering even more unique, luxury, small-ship experiences to our guests.”

Navin Sawhney, CEO Americas for Ponant, added “Ponant is proud to be at the forefront of small ship exploration. We are expanding our Ponant fleet to 14 ships by 2021. Now, through Paul Gauguin and its expertise, we will be able to offer our clients and partners yet another bucket list destination visiting the exotic islands of Tahiti, French Polynesia and the South Pacific.”

“As we join the Ponant family, we remain dedicated to our shared passion for authentic experiences, high quality service and sustainable practices. We are excited about introducing our guests to the wider world of Ponant and to welcoming Ponant guests on board Paul Gauguin,” remarked Diane Moore, CEO of Paul Gauguin Cruises.

Hong Kong cruise tourism unaffected by unrest

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 09 August 2019 09 August 2019

Alan Lam reporting from Hong Kong

For weeks, the interminable unrest in Hong Kong has been headline news all over the world. We see shocking scenes of street battles taking place in the city, which is otherwise deemed to be one of the safest in the world. Inevitably, as a result, Hong Kong has suffered a significant drop in visitor numbers. But so far, at least, its cruise business appears have escaped relatively unscathed.

“Preliminary figures show a double-digit decline in the number of visitor arrivals in the second half of July, leading to a fall in total arrivals for the month,” Hong Kong Tourism Board (HKTB) told CruiseBusiness.com Magazine.

According Jeff Bent, Managing Director of World Wide Cruise Terminals, to date, cruise ship calls and passenger numbers have not been affected to the same extent. “I think that given the protests do not target bystanders or shops, calls can continue as usual,” he told us. “The largest group of Hong Kong cruise passengers are locals, who have not been disturbed.”

But the picture is more complicated; the situation is still evolving from day to day. The exact extent of the impact on cruise tourism is as yet undetermined. Moreover, “since the ship deployment pattern is different, it is difficult to make direct comparison with the same period last year,” said HKTB.

Proper perspective

As the city prepares for yet another weekend of confrontations, it may be easy for the wider world to lose sight of the fact that Hong Kong is above everything else an iconic cruise destination, a highly efficient city with a shining word-class infrastructure, which is well run and well maintained, and has an almost peerless hospitality industry that is in no way undermined by the recent event.

International media have reported and often sensationalised the Hong Kong protests. For those of us who live and work in the city, the reality is quite different.

Indeed our daily life and movements have been inconvenienced somewhat by civil disobediences and sporadic public transport disruptions. The very nature of these protests is different from those encountered elsewhere. They are by and large good-natured and not threats to the safety of people and properties.

“International media do not generally make it clear that bystanders and local businesses have not been targeted. We hope that this is more accurately reflected going forwards,” said Bent.

Hong Kong’s cruise industry and HKTB are constantly monitoring the situation and are in communication with cruise lines. “At present, the operation of cruise terminals and the tourist activities in Hong Kong continue as usual,” said HKTB. “Hotel and tourism operators are also monitoring the situation, and are prepared to provide necessary assistance to minimise disruption to travellers in the event that unforeseen circumstances arise.”

Evolving situation

Our correspondent has been in Hong Kong throughout the unrest. He can report that so far, besides the well-publicized recent flight cancellations and transport disruptions there have been minimal interruptions to tourism-related services. Hotels, shops and restaurants are operating as usual. All cruise ports are functioning normally.

The situation remains fluid. More protests are expected. As the movement spreads, its very nature is evolving. Flashmob tactics are employed by some. The Chinese government is becoming increasingly agitated and it has not ruled out the deployment of the army. If the PLA (People’s Liberation Army) enters the tableau, the entire picture will be radically different.

As we write these lines, air, rail, and road transports services are operating normally and with typical efficiency. There are no discernible safety issues concerning travellers. Citizens and visitors are kept well informed of potential service interruptions.
“As the safety and security of travellers are of the utmost importance, the Hong Kong Tourism Board continues to monitor the current situation closely,” said HKTB. “Should there be any tourist areas or major attractions affected by public events, we will inform visitors via our website, visitor centres and visitor service hotline to help them plan their trips.”