Top Headlines

Income tax benefit lifted NCLH first quarter net income, operating income fell

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 09 May 2019 09 May 2019

A significant income tax benefit in the first three months of this year lifted net income of Norwegian Cruise Line Holdings Ltd (NCLH) well above the level of the same period last year, but operating income fell.

Net income amounted to $1181 million in January-March 2019 compared to $103.1 million in the same period last year. A tax benefit of $33.8 million compared to a tax expense of $2.5 million in the corresponding period in 2018 lifted the fresh figure.

Operating income decreased to $158.8 million from $167.0 million as cruise operating expenses increased to $826.6 million from $768.1 million. Revenues rose to 1.40 billion from $1.29 billion.

Earnings per share rose to $0.54 from $0.45, according to US GAAP, the company said in a statement.

“We were pleased to enter the year in a record booked position, which when combined with a solid WAVE season and record results for the first quarter, paved the way for an increase to our full year Adjusted EPS outlook that now exceeds the high-end of our previous guidance range, and would result in yet another year of double-digit Adjusted EPS growth," said Frank Del Rio, president and chief executive officer of NCLH.

“Our modest in-year capacity growth of less than 3%, coupled with continued robust global demand for our portfolio of brands allowed us to focus on driving pricing as evidenced by our first quarter topline beat, our record wave season pricing and higher net yield growth expectations for the remainder of the year.”

Revenue increased 8.5% to $1.4 billion compared to $1.3 billion in 2018. These increases were primarily attributed to the addition of Norwegian Bliss to the fleet, along with strong growth in organic pricing across all core markets and robust onboard spending. Gross Yield increased 2.8%. Net Yield increased 4.1% on a Constant Currency basis and 3.2% on an as reported basis.

Total cruise operating expense increased 7.6% in 2019 compared to 2018, primarily due to an increase in Capacity Days. Gross Cruise Costs per Capacity Day increased 2.4%. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 3.6% on a Constant Currency basis and 3.0% on an as reported basis.

Fuel price per metric ton, net of hedges increased to $461 from $448 in 2018. The Company reported fuel expense of $98.3 million in the period.

Interest expense, net increased to $73.5 million in 2019 from $59.7 million in 2018. The increase in interest expense reflects additional debt in connection with the delivery of Norwegian Bliss in 2018, Project Leonardo financing, as well as higher interest rates due to an increase in LIBOR.

Also included in 2019 were losses on extinguishment of debt and debt modification costs of $6.1 million in connection with refinancing of certain of our credit facilities.

Other income (expense), net was an expense of $0.4 million in 2019 compared to an expense of $1.7 million in 2018. In both periods, the expense was primarily related to losses on foreign currency exchange.

“In the quarter we had an income tax benefit of $33.8 million compared to an income tax expense of $2.5 million in 2018. In 2018, we implemented certain tax restructuring strategies that created the ability to utilize the net operating loss carryforwards of Prestige, for which we had previously provided a full valuation allowance. As a result, we recorded a tax benefit of $35.7 million in connection with the reversal of substantially all of the valuation allowance,” NCLH said.

AmaWaterways' revolutionary newbuild, AmaMagna, enters service

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

AmaWaterways today released highly anticipated images of its revolutionary new ship – AmaMagna – celebrating its arrival as she set sail on an inaugural voyage from Vilshofen, Germany to Budapest, Hungary. The brain child of AmaWaterways’ president and co-founder Rudi Schreiner, AmaMagna surpassed guests’ expectations on embarkation day with the highest level of luxury and generous personal space of any ship on the rivers. The first-ever photos of AmaMagna’s public spaces showcase the stunning design and elegant décor of a multi-level lounge and Main Restaurant, which features floor-to-ceiling windows. They also provide a first look at new dining venues – the Al Fresco Restaurant (pictured right) and Jimmy’s (pictured below), the latter of which is named in honor of the late Jimmy Murphy, one of AmaWaterways’ original co-founders and co-owners.

“Dreams are fueled by an individual’s passion but usually accomplished through the creativity and hard work of many,” said Schreiner. “This ship represents a labor of love for so many people who contributed groundbreaking ideas, as well as a lot of hard work that was done by the team to bring my dream project to reality.”

At an exclusive Oktoberfest welcome event in Vilshofen, Captain Jan de Bruijn, Cruise Manager Dragan and Hotel Services Manager Guido greeted AmaMagna’s first guests, many of whom were loyal AmaWaterways cruisers anxious to be among the first to experience the newest member of the family. Equally excited were first-time river cruisers like Barry Blake, traveling with the High Country Charity Foundation/Elk River Club group from Minnesota, who remarked “WOW! The ship is beyond believable. We had dinner at The Chefs Table last night…exquisite!”

“The delighted reactions of our guests and travel partners when they embarked on this cruise is genuinely rewarding,” said Kristin Karst, executive vice president and co-founder. “With the choice of four distinct dining venues, five bars, elegant lounges and exceptional accommodations, AmaMagna has been designed for those seeking a fresh, contemporary and dynamic take on river cruising. This beautiful ship has a direct appeal to ocean cruisers, who are accustomed to the luxury of expansive personal space and a wide variety of leisure activities during their vacation.”

AmaMagna is twice the width of traditional river cruise ships, yet welcomes only 20% more guests, allowing generous personal space - with more than half of the 98 staterooms designated as suites measuring between 355 and 710 sq. ft. All staterooms and suites are appointed with stylish décor and natural wood accents. The suites feature full outside balconies, open seating areas and luxurious bathrooms, complete with double sinks and walk-in showers. Six Grand Suites (474 sq. ft.) and an Owner’s Suite (710 sq. ft.) provide even more amenities with separate seating areas and sizable bathrooms complete with spa-like bathtubs.

The ship also provides enhanced entertainment offerings with an onboard cinema and amenities, including a large boutique; an expansive Zen Wellness Studio, complete with a large exercise area offering group classes focused on stretching, cardio and core strengthening and spin classes led by a professionally trained Wellness Host, a juice bar and two massage rooms, along with manicure, pedicure and hair services; and a sun deck with a large heated pool, relaxing whirlpool and sky bar. All sun deck facilities are easily accessible via an innovative pop-up elevator serving all four decks.

Exclusive to AmaMagna, guests may take advantage of a new Concierge Golf Program, providing the opportunity to experience four top-level golf courses in Hungary, Slovakia, Austria and Germany while enjoying the magic of river cruising. AmaMagna’s itineraries include Romantic Danube, Melodies of the Danube and Christmas Markets on the Danube.

AmaMagna will be officially christened by her godmother, respected travel expert and Emmy Award-winning television host, Samantha Brown, during a July 11 christening ceremony in Grein, Austria.

Costa Cruises to name its next China-bound newbuild Costa Firenze

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 06 May 2019 06 May 2019

Costa Firenze is the new Costa Cruises ship due to come into service in October 2020. Currently being built at the Fincantieri shipyard in Marghera (Italy), Costa Firenze is a 135,500 gross tons ship with capacity for over 5,200 guests; she is the sister ship of Costa Venezia, which was launched in Trieste on March 1 this year.

Costa Firenze and Costa Venezia are the Italian company's first ships specifically designed for the Chinese market. Before being positioned in Asia, Costa Firenze will spend a whole month in the Mediterranean, in October 2020, thus allowing all of Costa's customers in Europe and around the world to be the first to experience a truly unique vacation on board the new ship. Cruises will be available for booking starting from tomorrow: there will be five 5-to-7-day cruises and one 51-day positioning cruise to China.

“Given the success of the inaugural cruises of Costa Venezia, we have decided to keep Costa Firenze in the Mediterranean for a whole month before its positioning in Asia” – says Neil Palomba, President of Costa Cruises - “Costa Firenze is part of an expansion plan for the Costa Group that includes a total of 7 new ships being delivered by 2023, for a total investment of over 6 billion euros. The next ship to come into service, in October 2019, will be Costa Smeralda, a real tribute to Italy’s finest and our excellence”.

Costa Firenze's first cruise will sail from Trieste to Savona, departing on October 1, 2020, calling at Bari, Barcelona and Marseilles. On October 8, 2020, the ship will leave Savona for a short cruise to Marseilles, Barcelona and Savona. On October 12, 19 and 26, Costa Firenze will depart from Savona for three 7-night cruises including Naples (replaced by Civitavecchia for the October 19 cruise), Messina (replaced by Palermo for the October 19 cruise), Valencia, Barcelona and Marseilles. The final cruise available will be the positioning cruise to China: a 51-night itinerary starting from Savona on November 2, 2020 and ending in Hong Kong on December 22, 2020. The journey will be a discovery of a host of different cultures, landscapes and flavours. From the Mediterranean, the ship will sail to Dubai, through the Suez Canal and the Red Sea, calling at Naples, Messina, Greece, Israel, Jordan and Oman. From Dubai to Abu Dhabi, futuristic cities built in the desert, the ship will continue to India, Sri Lanka, Indonesia and Malaysia. The final part of the cruise will be devoted to the Far East: Singapore, Thailand, Vietnam and finally China. The itinerary can also be subdivided into three separate legs, Savona-Dubai (19 days), Dubai-Singapore (20 days) and Singapore-Hong Kong (14 days), which can also be combined with each other.

Like its sister ship Costa Venezia, Costa Firenze will offer a series of innovations designed specifically for the Chinese market, where the Italian company was the first to operate in 2006 and is currently the leader, allowing guests to discover Italian culture and lifestyle.

“Costa Venezia and Costa Firenze are the proof of Costa Cruises’ long-term commitment to China market,” stated Mario Zanetti, President of Costa Group Asia, and continued: “Costa Cruises is also dedicated to bringing the Italian Aesthetic lifestyle to Chinese guests while delivering Italian culture and experience to them. Together with Costa Venezia, the arrival of Costa Firenze will help boost the development of Chinese cruise industry.”

The ship is inspired by the city of Florence, representing centuries of Italian culture and history. During the Costa Firenze cruises, guests together with their families and friends will have a chance to immerse themselves fully in Italian beauty and aesthetic, which will take shape in various aspects of life on board: from interior design to dining, from entertainment to hospitality.

Comment – Capacity constraints in greatest of natural harbours

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 03 May 2019 03 May 2019

There is something paradoxical about the fact that the cruise industry continues to experience problems with land based infrastructure in Sydney, Australia.

Sydney is one of the greatest natural harbours in the world: a huge and sheltered bay that has several miles of shoreline and it has deep water too.

However, local authorities have preferred to dedicate the shoreline for housing rather than shipping. Moving cargo handling away from city centres, with all the associated noise and traffic, is a trend that has taken place in Sydney and in many cities around the world, and for good reasons.

But when cruise ships have nowhere to dock in the centre of a city, the experience that passengers have changes. Instead of walking down the gangway to enjoy the destination, it becomes necessary to take a bus or a taxi. The bigger the ship in question, the more traffic there will be on the roads.

True, Sydney has retained its iconic Circular Quay terminal, which is right in the centre of the city, near the famous harbor bridge. But facilities at Pyrmont on the other side of the bridge and Woolloomooloo near the Garden Island base of Royal Australian Navy have vanished. Media reports say that turnaround calls have taken place by using tenders.

Sydney’s problems are neither new nor unique. However, as tourism is being looked at with increasingly critical eyes in many cities – such as Amsterdam that imposed a tax on e.g. cruise passengers – problems arising from access to convenient terminals refuse to go away.

Instead, they pose a major concern for the cruise industry that is probably going to deepen in the years to come.

Infrastructure woes sharply slowed down Australian market growth last year

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 03 May 2019 03 May 2019

Problems with land based infrastructure particularly in Sydney contributed to a sharp slowdown in the growth of the Australian cruise market last year, CLIA Australasia figures show.

In 2018, a total of 1.35 million Australians took a cruise, which was just 0.9% more than in the previous year. In 2017, the year on growth had been robust 4.4%.

The number of passengers starting their cruise in an Australian port rose by just 0.1% last year as a result of capacity constrains on land. Local cruising accounted for 1.03 million passengers last year, while fly cruises to destinations further afield attracted 315,000 passengers, an increase of 3.4%.

“While the local industry faces growth constraints caused by a shortage of cruise infrastructure in Sydney, the construction of a new International Cruise Terminal in Brisbane and other cruise related projects announced in Cairns, Eden and Broome are expected to reignite growth in the homeport market,” CLIA Australasia said.

“Cruise lines have already announced significant new vessel deployments in this region beginning from 2020/2021. At the same time, smaller older vessels will be replaced with newer larger ships to cater to Australian passenger demand while a solution to the Sydney infrastructure constraints is developed.”

“Although the reduced growth trend may continue in the short term into 2019, the future outlook for the Australian ocean cruise passenger market remains positive. As government and local stakeholders recognise the potential for the industry to offer an even broader and more frequent range of domestic itineraries, this will increase the contribution the industry is able to deliver to Australia’s national and regional economies<” CLIA Australasia said.