News

Comment: It might serve Global Ports Holding well to exit cargo port business

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

Global Ports Holding (GPH), the Istanbul based company that operates 15 cruise ports and two cargo facilities, said in its first half 2019 interim report a major review of its business is underway.

“A strategic review was announced, after period end, to explore ways to maximise value for all stakeholders and includes a range of potential corporate activity including the sale of certain assets as well as strategic investments and partnerships,” GPH said.

In addition to the cruise ports, GPH operates two cargo ports – commercial in its words –in Turkey.

“Strong Cruise EBITDA growth of 14.3% (21.7% ccy) to $16.8m was offset by a decline in Commercial EBITDA of 13.1% (12.6% ccy) to $22.3m,” GPH said in the interim report.

No synergies

It might serve GPH well exit the Commercial part of its business. A few reasons could be said to favour this option. It is difficult to see any synergies between the two businesses.

Parts of the cargo port business, such as container handling, are already highly consolidated. It is difficult to imagine major growth prospects for GPH in this area.

In cruise port operation, GPH is the largest player and the only one that can be said to actively drive consolidation in the business, which unlike cruise ship operation, remain highly fragmented. It has a lot of work to do here, which will require both money and management resources.

Cruise portfolio needs diversification

GPH has said it wants to refine the business of the ports that it currently operates e.g. through developing retail in them. It also wants to add new facilities to its portfolio.

As the cruise industry continues to grow – more than 100 ships are on order - there should be a broad scope for GPH to grow its business, both organically and by signing contracts to operate additional facilities.

At present, its portfolio remains heavily centred on the Mediterranean. The company lists the location of its cruise ports on its website as follows:

-Western Mediterranean: 6 ports

-Adriatic: 4

-Eastern Mediterranean: 1

-Caribbean: 3

-Asia: 1

Driving diversification further would deepen GPH’s global footprint and reduce risks linked to heavy focus on a single region.

Investors could welcome cruise port focus

GPH went public in London in late 2017, when its shares floated at £7.43. They currently trade at about £2.65.

Clear focus on cruise port operations and elimination of disruptive events from the commercial business would probably help to lift the price.

On a positive note, GPH pays healthy dividends and at its current depleted share price, the stock yields about 17%.

Carnival Cruise Line selects PepsiCo as preferred beverage partner

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 13 November 2019 13 November 2019

PepsiCo, Inc. is partnering with Carnival Cruise Line, the world's most popular cruise line, to become the preferred beverage partner for its North American fleet. Beginning in January 2020, Carnival Cruise Line will begin serving a variety of beverages from the PepsiCo portfolio featuring premiere brands from Starbucks ready to drink coffee to fast-growing bubly sparkling water. When the transition is complete, Carnival guests will have a broad selection of beverage choices, from iced tea, sparkling water, coffee drinks and sports drinks to juices and soft drinks, including an array of low calorie and no sugar options.

"At Carnival Cruise Line, we invite our guests to Choose Fun, and now with PepsiCo's extensive portfolio of brands, we're able to give them more ways to choose a beverage that suits their taste, mood and preference," said Christine Duffy, president of Carnival Cruise Line. "PepsiCo's line-up of beverages will give our guests access to leading brands in growing non-soda categories like iced tea, juice and sparkling water, as well as popular soft drink brands that consumers love. We're also excited to work with PepsiCo on our shared commitment to sustainability, including a reduced reliance on plastics, and alternative ways to deliver and serve water and other beverages."

As they cruise, Carnival Cruise Line guests will be able to enjoy some of their favorite PepsiCo brands such as bubly, Pure Leaf, Naked Juice, Gatorade, MTN Dew, Starbucks, Pepsi, Pepsi Zero Sugar, Sierra Mist and Sierra Mist Zero Sugar among others.

"Our brands both celebrate having fun and offering something special for everyone, making PepsiCo and Carnival Cruise Line a great match," said Anne Fink, president of PepsiCo Global Foodservice. "We're excited to share the voyage as we create enjoyable, seamless experiences for Carnival Cruise Line passengers while they enjoy their fun vacations at sea and ashore."

MSC Cruises to postpone opening of Ocean Cay until December 5

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 13 November 2019 13 November 2019

MSC Cruises today announced that Ocean Cay’s opening date is now set for December 5, 2019. The development of Ocean Cay MSC Marine Reserve has been a multiyear project in which MSC Cruises worked with multiple contractors and partners to transform what was once an industrial sand excavation site into a stunning tropical destination, including designating the surrounding waters as a flourishing marine reserve.

This has been an extremely complex project as MSC Cruises has been fully committed to developing the destination in the most eco-friendly and sustainable way. At the same time, while the Company anticipated that the island would be ready to receive guests mid-November, as it reached the final stages of readying the island for its opening, some adverse weather conditions and unexpected last-minute operational challenges slowed down the completion of the island.

First, despite Hurricane Dorian and the demobilization of 600 workers, the Company took measures to remain on track and deliver the project on time. However, in the weeks that followed, further adverse weather conditions with strong winds and heavy swell caused several days of interruptions and created additional delays. This included heavy weather in early November which required part of one of the beaches to be further reinforced.

Secondly, last-minute issues with the leveling of the sand in certain areas of the island, the completion of the second breakwater and the landscaping aspects to be fully in line with the Company’s exceeding environmental criteria, have created further last-minute operational issues that could impact the guest experience.

The work on the island is an on-going process and the Company’s commitment to protect, restore and conserve this beautiful cay is part of a multi-phased effort. In the coming months, MSC Cruises will also introduce a Conservation Center and thriving coral nursery on the island, which will serve as an active base for coral education and research.

Providing guests with an outstanding experience in all destinations is a top priority for the Company and Ocean Cay is no exception. When guests start arriving at Ocean Cay they will be greeted by endless sweeping vistas of crystal blue waters and some of the most pristine white sand beaches. From early morning until late evening, they’ll have plenty of time to soak up the spirit of The Bahamas and enjoy the day as they wish, with no disruptions to shore excursions or beach and ocean discovery activities, as well as bars and complimentary dining options available.

The MSC Cruises ships that were scheduled to call the island before December 5, 2019 will be rerouted to alternative Caribbean destinations or will add a day at sea to their schedule. Guests will be compensated for the missed call at Ocean Cay.