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NCLH expects potentially prolonged delays in newbuilding deliveries

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 15 May 2020 15 May 2020

Norwegian Cruise Line Holdings Ltd (NCLH, the world’s third largest listed cruise shipping group, expects potentially “prolonged delays” in deliveries of ships it has on order.

“The Company expects that the effects of COVID-19 on the shipyards where its ships are under construction, or will be constructed, will result in delays in ship deliveries, which may be prolonged,” NCLH said in its firs quarter 2020 interim report.

The company has six Leonardo class ships on order for its Norwegian Cruise Line brand, with scheduled deliveries running from 2022 to 2027. Two vessels are due for Oceania Cruises, in 2022 and 2025, respectively, and one for Regent Seven Seas in 2023. All orders are with Fincantieri in Italy, according to SHIPPAX Info.

“As of March 31, 2020, anticipated capital expenditures for the remainder of 2020 were $0.4 billion with export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.1 billion,” the company said, adding that it is finalising documentation for deferrals of approximately $170 million of newbuilding related payments, net of financing, due through March 31, 2021.

“Once deferrals are finalised, anticipated total capital expenditures for the remainder of 2020 will be approximately $195 million,” NCLH said.

The group made a net loss of $1.88 billion in the first quarter of the year, compared to a profit of $118.2 million a year earlier, as a $1.61 billion impairment charge hit the fresh figure.

Cruise Ships Interiors Expo 2020 cancelled

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 14 May 2020 14 May 2020

COVID-19 has created a lot of uncertainty around international travel and events in the coming months. As a result Cruise Ship Interiors Expo America and Cruise Ship Hospitality Expo America has been cancelled. As a result, he 2021 event reverts back to the original month of June (June 8 - 9 2021).

"It is no secret the cruise industry has been drastically affected by the current pandemic and we therefore understand that attending a trade show is not a priority at this time. We want to provide the industry with a show which is beneficial for all involved, at a time when there is more positive news to share and it is safe to do so. September does not feel the right time to do this and hence the decision to cancel until June next year," CEO Toby Walters said in a statement.

"We still have a lot of activity going on between now and June to keep the cruise community connected:

– We are busy working on putting together an innovative virtual version of CSI and CSH on 2 - 3 September which will include exclusive conference sessions and a host of networking opportunities through virtual meetings with exhibitors and other attendees. More information on this will follow shortly.

– Voting for the first ever Cruise Ship Interiors Awards is open until 5th June. If you haven't already, be sure to head over to the website and cast your vote. Winners will be announced via video on 15th June.

– Cruise Conversations is our new series of webinars hosting panel discussions with influential members of the cruise community, covering key topics impacting the industry on a daily basis. Be sure to register for these and stay up to date with the latest thoughts, developments and news within the industry. Why not subscribe to our YouTube channel now and catch up on any you have missed.

– Cruise Ship Interiors Expo Europe and Cruise Ship Hospitality Expo Europe is still set to take place 2 - 3 December 2020 at ExCeL London. Registration for this show will open shortly. If you are interested in exhibiting at what is likely to be the only cruise event of the year, then please reply to this email for more information.

– Cruise Ship Interiors Expo America and Cruise Ship Hospitality Expo America will now take place 8 - 9 June 2021 at the Miami Beach Convention Center.

Carnival group plans layoffs, redundancies to save cash

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 14 May 2020 14 May 2020

Carnival Corporation & plc, the world’s largest cruise shipping group, is planning a range of measures to save money on the personnel side, the company said in a statement.

“Last month the company completed a successful financing effort with a heavily oversubscribed offering of senior secured notes, senior convertible notes and common stock, netting $6.4 billion of additional liquidity. To further strengthen liquidity, Carnival Corporation and its brands are announcing a combination of layoffs, furloughs, reduced work weeks and salary reductions across the company, including senior management. These moves will contribute hundreds of millions of dollars in cash conservation on an annualized basis,” Carnival said.

“Since the company paused its guest cruise operations in early March, workforce changes were largely placed on hold, even in the face of no meaningful revenue, to forestall the financial impact on its employees while still meeting its fiscal responsibilities – deferring employee actions beyond that of many others in similar situations during this pandemic. The company continues to support its travel agent partners by paying commissions on canceled cruises and on future cruise credits when guests rebook,” the company stated.

Viking Cruises Ltd announces pricing of private offering of $675 million of Senior Secured Notes

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 13 May 2020 13 May 2020

Viking Cruises Ltd has announced that it has priced its private offering of $675 million aggregate principal amount of 13.000% Senior Secured Notes due 2025. The offering of the Notes is expected to close on May 15, 2020, subject to customary closing conditions.

Viking intends to use the net proceeds from the Notes, after funding the repayment of $74 million of existing debt and accrued interest on certain river vessels, for general corporate purposes.

The Notes are being offered only to persons reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons outside the United States under Regulation S under the Securities Act. The Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold without registration unless pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and all applicable state laws.

TUI says crisis will drive digitalisation, non-profitable activities could be sold

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 13 May 2020 13 May 2020

TUI AG, the German tour operator that also has three cruise brands in its portfolio, says the current crisis will drive further digitalisation of its business.

“We will be less capital intensive, and we will continue our asset-right strategy in our Hotels & Cruise business, which we launched in 2019. We will right-size our airlines and order book, alongside restructuring. We will divest and address non-profitable activities within our business,” the Hannover based company said in its first half financial year 2020 interim report.

“Driving digitalisation - we will accelerate our Group transformation into a digital platform busi-ness. We will expand accommodation only and seat only products as well as increase dynamic packaging options,” TUI AG said.

The group’s cruise operations that comprise the fully owned Marella Cruises unit in the UK and 50% stake in TUI Cruises and Hapag-Lloyd, reported a sharp weakening of results in the three months to 31 March.

Revenues grew slightly, to €243.2 million from €234.2 million in the same period last year, but underlying EBIT became negative by €22.4 million from positive by €59.4 million, year on.

In the six months to 31 march, revenues rose to €481.6 million from €424.6 million, while underlying EBIT narrowed to €24.2 million from €106.4 million.

“As the first half came to a close, many of our cruise fleet had curtailed their itineraries and docked as a result of global COVID-19 measures. A small handful of our ships continued with their planned sailings returning all passengers to home countries by early April,” TUI said.

TUI Cruises and Marella Cruises were more notably impacted by lost contribution, compensation costs from cancelled itineraries and rerouting costs throughout March. BY contrast, the luxury and expedition cruise brand Hapag-Lloyd saw less operational disruption due to itinerary type and saw earnings break even in the first half.