News

Carnival third quarter net profit falls to $934 million

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 24 September 2013 24 September 2013

Carnival Corp & plc, the world’s largest cruise shipping group, has reported third quarter net profit of $934 million, down from $1.33 billion in the same period last year, on revenues of $4.73 billion, up from $4.68 billion a year befotre.

The group’s financial year ends on 30 November.

For the first six months, the profit fell to $1.01 billion from $1.20 billion, while revenues remained stable at $11.80 billion.

“While some of our current challenges and cost pressures will continue well into next year, we have tremendous opportunities to enhance shareholder value over time,” said group ceo Arnold W. Donald in a statement.

"Asia is a key focus of our international expansion. During the third quarter, we opened five additional sales offices in China, following the establishment of a corporate office in Singapore earlier this year," said Donald.

He added that Princess Cruises recently announced plans to homeport Sapphire Princess in China for a four-month season beginning in May 2014, bringing the total to five vessels in the region next year dedicated to guests sourced from Asia.

Earlier this month, the company announced it had received the support of the U.S. Environmental Protection Agency, the U.S. Coast Guard and Transport Canada to implement a leading edge "scrubber" technology designed to reduce air emissions on 32 ships. "The company has been a partner in the development of the scrubber technology and will take the lead in further refining both the scrubber design and installation process over the next few years. In addition to exceeding stricter air emission standards, this technology will help us mitigate escalating fuel costs," said Donald.

Carnival Sunshine rebuilt to benchmark big refit

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 24 September 2013 24 September 2013

Recent $155 million transformation of Carnival Destiny into Carnival Sunshine was partly carried out so that Carnival Corp & plc, the Anglo-American cruise shipping group, could gain experience from such a huge project, Howard S. Frank, deputy chairman and Chief Operating Officer of the group, told Cruise Business.

"It was a huge undertaking, it put our guys under a lot of pressure," said Frank, whio spoke to Cruise Business in London. Asked if the project could be seen as a benchmark of such a large project, Frank replied: "Yes, you could say so." It is unlikely that an equally large refit would take place in the near future, he added.

The group will continue to upgrade its vessels, both from commercial and technical point of view, but the extent of work on individual vessels will depend on specifications of the ship in question. Adding decks on top of existing ones will not be possible from stability point of view on all vessels, Micky Arison, chairman of the Carnival group, pointed out during a presentation in London.

Frank stated that as more and more ships enter 15-20 years' age, capital expenditure on mid-life refits is poised to increase. The group is not in a hurry to sell older vessels as long as they continue to generate good returns, Frank said.

Another aspect is the second hand market, which according to him is "not very strong." In recent past,Carnival's P&O Cruises unit sold the 1984 built Artemis for a company that chartered it out to Phoenix Seereisen, the German tour operator, on long term contract. Carnival granted the buyer seller's credit to ensure completion of the deal. "The buyer was very strong and could refinance it (seller credit)," Frank stated, adding that not all potential buyers of second hand tonnage are in this position.

However, once the European economies' recovery gathers momentum, tour operators are potential buyers of second hand ships. Chinese companies also screen the market, with various degrees of intention to enter the cruise sector, Frank concluded.

Britain "financial pillar" for Carnival group

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 24 September 2013 24 September 2013

Although Carnival Corp & plc, the world's largest cruise shipping group, continued to seek growth in new source markets in the Far East and South America, traditional markets like the UK continue to play a major role in the future of the group, said Arnold. W. Donald, group ceo.

"The UK is a financial pillar for the group," Donald said at the presentation of the name of the new ship of P&O Cruises in London on Tuesday. The 143,000 gross ton ship will be called Britannia.

David Dingle, ceo of P&O Cruises and Carnival UK, said that the British market remains demand driven and it has recorded an average growth rate of 5% from 2008. Last year, however, the market's growth effectively stalled at 1.7 million passengers, but then again no new ships were introduced to target the market.

Britannia will be the eight ship of P&O Cruises and it will grow the capacity of the brand by 24% when it will enter service in March 2015. Dingle forecast that the British market may grow to 2.0 million to 2.5 million passengers by the year 2020. The introduction of Britannia appears well timed as the economic cycle in the country is strengthening.