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All Leisure group cuts first half loss slightly to £4.2 million

  • Written by Kari Reinikainen
  • Category: Top Headlines

AllLeisure group, the listed UK based company that entails Swan Hellenic,Voyages ofDiscovery and Hebridean Island Cruises brands, reduced its net loss to £42million in the first six months of the year from £4.5 million in the same period in 2010. Revenues increased to £34.8 million from £32.8 million. Cash and unrestricted bank deposits decreased to £7.0 million on 30 June from £15.2million a year ago, while shareholders’ equity fell to £22.6 million from £25.6 million a year previously.

Commenting on the business outlook, Roger Allard, chairman said:” Despite the economic environment, remaining Summer 2011 capacity is currently 86% sold, including charters,(2010: 84%). However, these load factors have been achieved at lower yields and against a higher cost base.”

“Furthermore we envisage that fuel costs over the year will continue to rise and are now, in sterling terms, at their highest ever levels. Accordingly we believe fuel costs will be £1.3m higher than the previous financial year, and due to the continued weak UK economic environment it has not been possible to pass on this increase.”

The small Swan Hellenic river cruise programme for Summer 2011 has sold very well. ForWinter 2011/12 both mv Discovery and Minerva will be sailing to the Far-Eastbut it is also planned for mv Minerva to go into a dry dock.

“In addition to continued geo-political unrest, unprecedented natural disasters,the current global economic environment and continued low UK interest rates,the last six months has also seen no alleviation of the adverse cost environment that the Group is operating in – a situation primarily caused bythe weakness of sterling. Despite the difficult cost environment, it is encouraging that the strength of our brands and quality of our customer service have secured strong booking levels and for this reason I am confident that shareholders will see a significant improvement in returns once the adverse economic and exchange rate environment finally abates,” Allard said.

RCCL says woes on Mediterranean region turmoil deepen

  • Written by Kari Reinikainen
  • Category: Top Headlines

The ongoing conflicts in the Eastern Mediterranean and its spillover effects continues to create hesitation around travel to the region, says Royal Caribbean Cruises Ltd (RCCL), the second largest cruise shipping group in the world. However, other sectors of its business perform well.

“Some of this was already evident at the time of the company's last guidance.However, during the second quarter, the civil unrest in the EasternMediterranean expanded to other areas including Syria and Greece and the level of concern amongst travelers grew as tensions in the region dominated the headlines. This has resulted in a full year yield reduction of approximately150 basis points versus April guidance.”

Net Yields for the Mediterranean are now expected to be down approximately 4% for the year, which is in stark contrast with the rest of the company's portfolio.The impact related to the events in Japan was reasonably clear by the time ofthe last guidance. The impact on bookings was immediate, but the situation has now stabilized. The guidance for 2011 has not changed materially from previous guidance and the outlook going forward is very positive.

“In a reversal of the trends observed in April, the company's revenues have been negatively influenced by the strengthening of the U.S. Dollar relative to other currencies. Assuming current currency exchange rates, the company expects Net Yields for the full year on an as-reported basis to decline approximately 50 basis points from its previous guidance as a result of currency.”

The company noted that with the exception of the Eastern Mediterranean, it continues to observe strong demand for its products, especially the Caribbean,Alaska and Northern Europe. The strength of this demand (both rate and volume)reinforces that Eastern Mediterranean pricing softness this summer appears to be geopolitically related and that the economic demand for its products is strong. Further supporting this premise, excluding the Mediterranean, NetYields for the year are expected to be up approximately 8% (approximately 6% ona Constant-Currency basis), RCCL said.

RCCL second quarter net income rises to $93.5 million

  • Written by Kari Reinikainen
  • Category: Top Headlines

RoyalCaribbean Cruises Ltd. (RCCL), the second largest cruise shipping group in the world, announced second quarter net income of $93.5 million, or $0.43 pershare, versus $53.7 million, or $0.25 per share, in 2010.

Revenues improved to $1.8 billion in the second quarter of 2011 compared to $1.6 billion in the second quarter of 2010 as a result of capacity increases and yield improvements. Net Yields for the second quarter of 2011 increased 3.8% (0.8% on a Constant-Currency basis). Excluding Mediterranean sailings, Net Yields in the second quarter improved 9.8% (7.3% on a Constant-Currency basis)

Costs in the second quarter of 2011 were virtually flat on a constant-currency basis and most expense categories performed better than expected. NCC excluding fuel increased 2.3% (decreased 0.1% on a Constant-Currency basis).



RCCL finds error in interest expense accounting

  • Written by Kari Reinikainen
  • Category: Top Headlines

RoyalCaribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group,says it has identified an error in the previous accounting treatment of interest expense relating to its amortization of certain financing fees and has revised its past financial statements to reflect the correct accounting.

“Second quarter EPS was 47 cents before the Interest Expense Revision. After adjusting for the revision, the company reported earnings of 43 cents per share which is the midpoint of previous guidance range of 40 cents to 45 cents,” the company said in a statement.

“Excluding the Interest Expense Revision, full year 2011 EPS guidance is now expected to be $3.05 to $3.15, reflecting a 10 cent reduction to prior guidance oncontinuing pricing softness for Eastern Mediterranean sailings, partially offset by strong cost savings. The Interest Expense Revision is forecasted toreduce 2011 EPS by 20 cents resulting in full year 2011 EPS guidance of $2.85 to$2.95,” RCCL continued.

Cruise industry's contribution to U.S. employment, economy grows in 2010

  • Written by Teijo Niemelä
  • Category: Top Headlines


The North American cruise industry generated 329,943 jobs that contributed a $15.2 billion wage impact on the U.S. economy in 2010, a 5.1 percent increase in employment and a 7.0 percent rise in wages over 2009, according to the latest independent study commissioned by Cruise Lines International Association (CLIA). The total cruise industry economic impact in the U.S. in 2010 was $37.85 billion of gross output, a 7.8 percent increase over last year.

This positive economic contribution spread across every state economy via $18 billion in direct cruise industry spending, with ten states accounting for 78 percent of total employment and income impacts.

"These job numbers are good news given the challenging economy. We are pleased with the strong gains in the cruise industry's economic contributions, and that CLIA member lines were directly or indirectly responsible for putting nearly 330,000 Americans to work," said Howard Frank, CLIA's chairman.

Christine Duffy, CLIA's president, said: "As a global industry, cruise lines have managed to navigate through some tough economic times that have made vacationing decisions for millions of people more difficult. Our members have also worked through adversity created by geopolitical events and natural disasters. It is great to see the progress that was made in 2010 and this economic study demonstrates that the travel industry, and cruising in particular, matter to our economy. The cruise industry provides products that consumers value highly; the purchase of those products provides significant direct and indirect economic impact that benefits the economic well-being of Americans everywhere."

According to "The Contribution of the North American Cruise Industry to the U.S. Economy in 2010," prepared by BREA (Business Research & Economic Advisors) for CLIA, total industry direct expenditures with U.S.-based businesses increased by 5.0 percent to $18 billion. As a result of direct spending, the cruise industry generated the direct employment of 140,359 workers who earned $5.84 billion with U.S. businesses. In aggregate the direct employment and wage impacts increased by 4.4 percent and 6.5 percent respectively, over 2009.

The expenditures by the cruise lines and their passengers and crew generated employment, income and other economic benefits throughout the U.S. economy. These economic benefits arise from five principal sources: spending by cruise passengers and crew for goods and services associated with their cruise; shoreside staffing by the cruise lines for their headquarters, marketing and tour operations; expenditures by the cruise lines for goods and services necessary for cruise operations; spending by the cruise lines for port services at U.S. ports-of embarkation and ports-of-call; and expenditures by cruise lines for the maintenance and repair of vessels at U.S. shipyards, as well as capital expenditures for port terminals, office facilities and other capital equipment.

State by state, the cruise industry's economic impact varied according to the scope of cruise line operations, with the major benefactors being those states with ports of embarkation. In Florida, which accounts for 60 percent of all U.S. embarkations, the industry generated $6.3 billion in direct spending which helped create 123,255 jobs paying $5.4 billion in income. California, with 10 percent of the cruise industry's direct expenditures, was the beneficiary of $1.8 billion in spending and 41,697 jobs. New York, with a 32 percent increase in passengers and crew visits in 2010, accounted for 6.7 percent of direct expenditures, with the industry generating $1.2 billion in spending and creating 14,833 jobs. Texas, with a 31 percent increase for last year, generated $1.1 billion in spending and 16,457 jobs. In order, the remaining top ten states for economic impact were: Alaska, Washington, Georgia, Massachusetts, Illinois and Colorado.

Florida's pre-eminent position is largely due to its five cruise ports: Miami, Port Everglades, Port Canaveral, Tampa, and Jacksonville. Florida led a list of 15 ports of embarkation that account for 90.7 percent of total U.S embarkations. In order, the top ten ports are: Miami, Port Everglades, Port Canaveral, New York, Seattle, Galveston, Long Beach, Tampa, Los Angeles, New Orleans. There were 9,694,000 U.S. embarkations during 2010.

The economic impact report also noted that CLIA member lines carried 14.8 million passengers in 2010, an increase of 10.3 percent, the largest year-over-year jump since 2003. Similar to the rest of the travel industry, while occupancy and demand are up year over year, rates are still below where they were before the recession. Resident U.S. cruise passengers reached the 10 million mark for the first time, with a record number of embarkations at US. ports. With the addition of nine new ships, CLIA lines increased fleetwide lower berth capacity to 307,707 on 176 ocean-going ships, an 8.1 percent rise. Despite the capacity increase, CLIA member line ships operated at 103.1 percent occupancy in 2010.