Carnival files shelf registration for $1.5 billion at the market equity offering

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Written by Kari Reinikainen Kari Reinikainen

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Published: 11 November 2020 11 November 2020

Carnival Corporation & plc, the world’s largest cruise shipping group, has filed a prospectus supplement with the U.S. Securities and Exchange Commission under which it may offer and sell shares of Carnival Corporation common stock up to the amount of $1.5 billion through an “at-the-market” equity offering programme.

Carnival Corporation is the US listed and panama domiciled holding company in the Carnival Corporation & plc group.

This follows the completion on 30 October of the sale of 67.1million shares of Carnival Corporation common stock under its previous $1.0 billion in a previous at-the-market equity offering programme.

“The timing of any sales will depend on a variety of factors. J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC (the “Sales Agents”) are acting as sales agents under the New ATM Offering. PJT Partners is serving as independent financial advisor to Carnival Corporation,” the company said in a statement.

NCLH reports deep third quarter loss, interest expenses leap

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Written by Kari Reinikainen Kari Reinikainen

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Published: 10 November 2020 10 November 2020

Norwegian Cruise Line Holdings Ltd (NCLH), the world’s third largest cruise shipping group, has reported a deep loss for the third quarter, while interest expenses more than doubled on the same period last year.

Net loss amounted to $677.4 million, equal to loss per share of $2.50, compared to a profit of $450.6 million and earnings per share of $2.09 year on. Revenue decreased to $6.5 million compared to $1.9 billion in 2019 due to the complete suspension of voyages in the quarter.

“Interest expense, net was $139.7 million in 2020 compared to $60.2 million in 2019. The change in interest expense reflects additional debt outstanding at higher interest rates, partially offset by lower LIBOR. Included in 2020 were losses on extinguishment of debt and debt modification costs of $6.6 million,” the company said in a statement.

 “While booking volumes since the emergence of the Covid-19 global pandemic remain below historical levels, there continues to be demand for future cruise vacations, particularly beginning for sailings operating in the second half of 2021 and beyond, despite limited marketing efforts. Our overall cumulative booked position for the first half of 2021 remains below historical ranges as expected due to the current uncertain environment, however, for the second half of 2021 it is in line with historical ranges,” NCLH said.

Pricing for full year 2021 is in line with pre-pandemic levels, even after including the dilutive impact of future cruise credits. “Pent up future demand for cruising is further demonstrated by record booking achievements in September and October including Oceania Cruises’ Labor Day upgrade sale which was the most successful holiday promotion in the line’s history, a new World Cruise opening day booking record for Regent Seven Seas Cruises’ 2023 World Cruise and a new all-time largest single booking day in Regent’s history with the launch of its 2022-2023 Voyage Collection, NCLH stated..

In order to provide additional flexibility to its guests, NCLH has also extended its modified final payment schedule for all voyages through April 30, 2021 which requires final payment 60 days prior to embarkation versus the standard 120 days.

 As of September 30, 2020, the Company had $1.2 billion of advance ticket sales, including the long-term portion of advance ticket sales, which includes approximately $0.85 billion of future cruise credits.

NCLH’s monthly average cash burn rate for the third quarter was approximately $150 million. For comparative purposes, assuming vessels remain at minimum manning status, fourth quarter 2020 average cash burn rate would be higher at approximately $175 million per month, primarily driven by the timing of interest expense. For the second half of 2020, this would result in an average monthly cash burn rate of approximately $160 million, in line with the company’s previously disclosed target rate during voyage suspensions, it said.

Meyer Turku concludes talks regarding staff reductions

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Written by Kari Reinikainen Kari Reinikainen

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Published: 10 November 2020 10 November 2020

 

Meyer Turku, the Finnish cruise ship builder, said it has closed the negotiations concerning permanent lay-offs, resulting in a much lower number than at first planned.

The company will permanently lay off 84 people from outfitting and design functions. The number includes nine blue-collar and 75 white-collar workers. “Together with the lay-off numbers announced in August, Meyer Turku will lay off 250 people. Part of the reduction of the workforce is done through retirement and other personnel arrangements. The original estimation at the start of the YT negotiations in April was 450 people,” the company said in a statement. 

YT refers to the Finnish legislation that requires talks to be held between the employer and staff in case e.g. the personnel would have to be reduced.

“Unfortunately we have to take some painful steps to adjust to the actual market situation that obviously has changed dramatically during this year. We are continuously working on securing the future of the yard on a long term basis”, CEO Tim Meyer said. The people concerned will be offered personal guidance, support and specialized training to ease the transition.

In August, Meyer Turku concluded an agreement with its customers to stretch the fixed order book to reach until 2026. This is an important step to stabilise the entire Finnish cruise ship building cluster until the market situation for new orders recovers again.

 

 

Cruise shares leap on Covid-19 vaccine news

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Written by Kari Reinikainen Kari Reinikainen

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Published: 09 November 2020 09 November 2020

Shares in listed cruise shipping companies soared on bullish equity markets after news had emerged that Pfizer, the US pharmaceutical giant, had made significant progress in its efforts to develop a vaccine against the Covid-19 virus.

Carnival Corporation, the US listed and Panama domiciled holding company in the Carnival group, traded some 31% up since the opening, at $18.12 around 1000 AM local time.

Carnival Plc, the group’s UK listed and domiciled holding company, had risen 34% to trade at just under £11.20. Shares are quoted in pence rather than pounds on the London market, hence the price of 1,198 /1,200 in the image above.

Royal Caribbean Group was quoted at $74.46 in New York, up 27% and Norwegian Cruise Line Holdings at $20.70, up about 22% since the opening of the market today.