Top Headlines

Norwegian Cruise Line reports profit for the first quarter 2014

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 29 April 2014 29 April 2014

Norwegian Cruise Line today reported results for the quarter ended March 31, 2014. The company also announced that its Board of Directors today has authorized a three-year, $500 million share repurchase program (see separate story).

First quarter highlights

– Adjusted EPS improvement to $0.23 from $0.06 in 2013

– Net Yield increase of 3.8% (3.9% on a Constant Currency basis)

– Revenue increase of 25.9% to $664.0 million

– Adjusted EBITDA increase of 39.6% to $139.3 million; 200 basis point margin improvement

– Successful introduction of Norwegian Getaway to the fleet

First quarter results

"Our strong results in the quarter include an almost four-fold increase in earnings on an adjusted basis," said Kevin Sheehan, President and Chief Executive Officer of Norwegian Cruise Line. "With both Breakaway class ships now in our fleet, it is easy to appreciate the impact of their impressive earnings power, which includes commanding double-digit premiums over other Norwegian ships in the same itinerary," continued Sheehan.

For the first quarter of 2014, the Company reported an increase in Adjusted EPS to $0.23 on Adjusted Net Income of $49.6 million compared to $0.06 and $12.9 million, respectively for the same period in 2013. On a GAAP basis, diluted earnings per share and net income were $0.24 and $51.3 million, respectively.

Net Revenue in the period increased 27.8% to $499.3 million, driven by a 23.2% increase in Capacity Days and a 3.8% improvement in Net Yield. The increase in Capacity Days was primarily from the addition of Norwegian Breakaway and Norwegian Getaway to the fleet in May 2013 and January 2014, respectively. The Net Yield improvement of 3.8%, or 3.9% on a Constant Currency basis, was a result of higher passenger ticket and onboard and other revenue. Revenue for the period increased to $664.0 million from $527.6 million in 2013.

Adjusted Net Cruise Cost excluding Fuel per Capacity Day increased 3.7% (3.4% on a Constant Currency basis) mainly due to inaugural and launch-related costs for Norwegian Getaway along with incremental expenses for the planned dry-dock of Norwegian Spirit. The Company’s fuel price per metric ton, net of hedges, was $643 compared to $673 in 2013. Fuel consumption per Capacity Day in the quarter decreased 6.8% which excludes an additional benefit of 0.7% from dockside charters for vessels used as floating hotels.

Interest expense, net for the quarter was $31.2 million compared to $127.7 million in 2013. Interest expense, net in 2013 included $90.5 million in charges related to the prepayment of certain credit facilities and the redemption of certain of the Company’s senior notes with proceeds from both the Company’s initial public offering and other transactions. Excluding these charges, Adjusted Interest Expense, net was $37.2 million in 2013. The year-over-year reduction in interest expense is due to lower interest rates in the period resulting from the Company’s capital structure optimization initiatives carried out in 2013 which more than offset the impact from higher debt balances related to the financing for Norwegian Breakaway and Getaway.

The Company recorded an income tax benefit of $9.4 million compared to an expense of $2.2 million in the prior year. The income tax benefit in 2014 is primarily related to the election of an alternative, acceptable tax methodology in connection with the change in the Company’s corporate entity structure completed in 2013. This election resulted in a $6.7 million non-recurring benefit which has been excluded from Adjusted Net Income and Adjusted EPS.

MSC Cruises to re-deploy Divina to the Med in summer 2015

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 25 April 2014 25 April 2014

"MSC Cruises is strengthening its commitment to serving the North American market with the deployment of the MSC Divina to the Mediterranean during the summer of 2015. The first of the line’s ships dedicated to North American travelers, MSC Divina will bring its signature service and onboard experiences to the most sought-after Mediterranean seven-night itineraries beginning May 16 through October 3, 2015," the company said in a statement.

MSC Divina is currently sailing Eastern and Western Caribbean cruises from PortMiami which continue through April 2015.

"After exposing MSC Divina to thousands of guests in the Caribbean, customer surveys are showing an increased desire for North Americans to sail onboard MSC Divina in the Mediterranean," said Richard E. Sasso, president, MSC Cruises USA. "The enhancements made at the start of the Caribbean season to ready MSC Divina for the North American market have certainly paid off with positive ratings and increased repeat business. This has led to our decision to maintain the MSC Divina onboard product designed around the senses of American taste, palette, entertainment and comfort and expand her offerings into the Mediterranean, the hottest and most desired vacation destination by North Americans today," continued Sasso.

MSC Divina will begin her Grand Voyage on April 26, 2015, from Miami making a stop in New York, King's Wharf, Bermuda and then continuing onto Ponta Delgada, Lisbon, Cadiz, Barcelona, Naples and Civitavecchia. From May 16, 2015 through October 3, 2015, the ship will sail seven-night Mediterranean cruises departing from Civitavecchia and visiting the ports of La Spezia, Cannes, Palma de Mallorca, Barcelona, Naples and returning to Civitavecchia. While in La Spezia, MSC Divina will offer late night stays allowing guests to visit nearby cities of Pisa, Florence, Portofino and Cinque Terre. In addition, the call in Naples will allow time to visit Pompei, Capri, Sorrento, and the Amalfi Coast.

Guests will have the opportunity to embark in two marquee ports, Civitavecchia on Saturdays and Barcelona on Wednesdays, allowing for a customized vacation experience with outstanding pre- and post-cruise opportunities and ample airlift from the United States and Canada.

In October 2015, upon completion of her Mediterranean season with a unique 10-night cruise, MSC Divina will enter dry dock in Europe. While in dry dock, the ship will receive some surprise enhancements specifically for the North American market before returning back home to South Florida for a third season of seven-night Caribbean cruises starting in November 2015.

“We are very excited to extend to our travel agent partners the ability to now offer the best of MSC Divina in both the Caribbean and the Mediterranean,” said Ken Muskat, executive vice president, sales, PR & guest services. “Continuing our Serving You commitment to the trade, we will be offering extensive training on how to best sell MSC Divina in the Mediterranean, provide online toolkits with ready-made marketing and selling materials, and launch a new e-learning online tool to ensure our partners are completely confident selling the MSC brand in Europe. Our recent sales force expansion was not only for MSC Divina in the Caribbean, but a strategic long term decision given the opportunities we have with Europe and expectations that future new-builds will be coming to our market,” Muskat continued.

Michelle Fee, president & CEO of Cruise Planners, called the decision “opportune” given the fact that MSC Divina has quickly established a name for herself in the North American market and demand for a North American product in the Mediterranean is increasing. MSC Divina provides a comfort to the market that can now be extended to other destinations.

MSC Divina's 2015 Mediterranean season will first open for pre-sale to past guests of MSC Cruises on Tuesday, April 29, 2014. Bookings will then be open to the general public on Thursday, May 1, 2014. Bookings made by July 31, 2014 will be eligible for an exclusive balcony upgrade plus onboard credit.

More ships, new itineraries coming for Viking River Cruises in 2015

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 24 April 2014 24 April 2014

Demonstrating no slowdown in the European river cruise boom, Viking River Cruises has confirmed official plans for the company’s expansion in 2015. Viking has ordered 12 new river vessels for next year – 10 additional award-winning Viking Longships and two unique vessels for the Elbe River. Next year will also see the launch of two new itineraries highlighting the Rhine River. The announcement comes directly on the heels of Viking’s world record-setting christening last month of 18 vessels across four countries in five days and will bring the company’s total fleet size to 64 river vessels in 2015.

“When we started this company 17 years ago, we had two cell phones and no money, but we knew there was an opportunity to do things differently,” said Torstein Hagen, Chairman of Viking Cruises. “By focusing on an audience of like-minded travelers, and designing ships and itineraries that help travelers better explore their destinations, we are proud that river cruising is now the fastest-growing segment of travel.”

New Longships for 2015

Of the 12 vessels on order for 2015, 10 are Viking Longships, which have amassed a long list of prestigious awards since debuting in 2012. They recently topped Condé Nast Traveler’s annual readers’ Cruise Poll for best river cruise ships – with Viking Odin specifically being named the #1 top-ranking river cruise ship – and the entire class of vessels was named “Best New River Ships of 2012” in Cruise Critic’s Editors’ Picks Awards.

Viking Longships integrate a patented corridor design and cutting-edge technology with comfortable amenities that reflect guest preferences and current travel trends. These features include a revolutionary all-weather indoor/outdoor Aquavit Terrace that reinvents the onboard lounge experience by bringing the panoramic outdoor river scenery indoors with retractable floor-to-ceiling glass doors and allows guests to enjoy the views and dine al fresco. Accommodating 190 passengers in 95 staterooms, Viking Longships have a patented layout that allows for two Explorer Suites – the largest river cruise suites in Europe – as well as seven two-room Veranda Suites with a full-size veranda in the living room and a French balcony in the bedroom; 39 Veranda Staterooms with full-size verandas; and 22 French Balcony Staterooms. Additionally, all Longships have green upgrades, such as onboard solar panels and organic herb gardens, and energy-efficient hybrid engines that also reduce vibrations for a remarkably smooth ride.

New ships for the Elbe River in 2015

Viking’s two additional ships on order for 2015 will be designed specifically for the company’s Elegant Elbe itinerary. As a result of high customer demand, the two new ships will join the recently refurbished Viking Schumann and Viking Fontane, doubling the company’s capacity on the Elbe River in 2015. Hosting 98 guests in 49 staterooms, sister ships Viking Astrild and Viking Beyla will be the newest and most modern ships sailing the Elbe River. Smaller than Viking Longships, with customized hulls and engines specially designed to navigate this unique river, these ships will tout many of the same popular features – including an Aquavit Terrace, a wide variety of stateroom choices, hotel-style beds, energy-efficient hybrid engines, onboard solar panels and an organic herb garden, as well as Viking’s signature Scandinavian design aesthetic.

A 10-day cruisetour with hotel stays in Berlin and Prague, Elegant Elbe is Viking’s only itinerary offering the unique opportunity to sail through eastern Germany. Featuring stops in Magdeburg, Wittenberg and Dresden, this itinerary offers the quintessential blend of urban culture, history and scenic cruising – including sailing past the cliffs of Germany’s “Saxon Switzerland.” It also includes visits to six UNESCO World Heritage sites.

New itineraries for 2015

Viking will also introduce two new itineraries in 2015, both of which showcase scenic treasures along the Rhine River during the springtime. Details of the itineraries include:

– Legends of the Rhine - This 8-day journey between Amsterdam and Frankfurt provides a window into some of the historic eras and events that have shaped northern Europe. Cruise through the Middle Rhine Valley, lined with dozens of medieval castles, and take walking tours of castles and cobbled streets. Marvel at the soaring carved interiors and stained-glass windows of Cologne’s iconic Gothic cathedral, and sample the local beers. Stop in Remagen, the site of World War II’s Operation Market Garden, and Nijmegen for a guided visit to the Overloon War and Resistance Museum. Spend a full day enjoying the delightful Golden Age city of Amsterdam, including a canal boat tour. Prices start at $2,356 per person, with 2015 departure dates in April and May.

– Rhine Rhapsody - On this unique new cruisetour, spend 10 days amidst the timeless elegance of Paris and the breathtaking scenery along the Rhine, Main and Moselle Rivers. Take a guided tour of the French capital to see some of its historic locations; then spend some time exploring its neighborhoods, museums and cafés. Scenic cruising takes you to the heart of smaller European towns like Trier, Rüdesheim and Cochem, where there is so much to discover, right through the Rhine Valley, famous for its many riverside castles. Stop in Strasbourg, the perfect marriage of French and German cultures (and cuisines), and explore the market squares of Basel’s charming Old Town area. Prices start at $2,906 per person, with 2015 departure dates in April and May.

The expansion of Viking’s fleet comes as a response to increased traveler demand for destination-focused cruises. In addition to the new Viking Longships and new vessels in Portugal, the company’s first ocean ship, the 930-passenger Viking Star, is currently under construction and will set sail in early 2015.

Royal Caribbean reports first quarter results and updates 2014 guidance

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 24 April 2014 24 April 2014

Royal Caribbean Cruises Ltd. today reported first quarter results and slightly raised its outlook for full year 2014.

Overall, the year is developing along the course the company previously anticipated. First quarter results were at the lower end of the company's guidance due to some minor voyage disruptions but this impact is expected to be offset during the rest of the year. Full year Adjusted Earnings Per Share (Adjusted EPS) is expected to be in the range of $3.25 to $3.45, which raises the company's previous guidance by $0.05.

Results for the First Quarter 2014

– Net Yields were down 0.3% on a Constant-Currency basis (down 2.7% As-Reported). Unplanned voyage disruptions within the quarter negatively impacted yields for the quarter by about 0.5%.
– Net Cruise Costs ("NCC") excluding fuel increased 1.3% on a Constant-Currency basis (1.0% As-Reported).
– Adjusted Net Income was $46.1 million, or $0.21 per share, versus Adjusted Net Income of $78.2 million, or $0.35 per share, in 2013.
– US GAAP Net Income, which reflects some restructuring and related charges, and the impact of the operations of the divested Pullmantur non-core businesses, was $26.5 million, or $0.12 per share versus $76.2 million, or $0.35 per share in 2013.

Full Year 2014

– Adjusted EPS is expected to be in the range of $3.25 to $3.45 per share.
– Net Yields are expected to increase 2% to 3% on a Constant-Currency basis (2% to 3% As-Reported).
– NCC excluding fuel are expected to be flat to slightly down on a Constant-Currency basis (Approx. flat As-Reported).

The company has completed the sale of Pullmantur's non-core businesses. As previously disclosed, the results of these businesses and the restructuring and related costs associated with the sale of these businesses along with our previously announced global restructuring actions have been excluded from non-GAAP measures to provide better comparability.

For the full year we expect to incur $23 million in restructuring and related charges and approximately $11 million from the first quarter operating loss incurred by the divested Pullmantur non-core businesses, totaling $34 million in 2014. In the first quarter we incurred $19.6 million, leaving approximately $14.4 million for the balance of the year.

"It is gratifying to see 2014 developing methodically along such a positive trajectory," said Richard D. Fain, chairman and chief executive officer. "Our business strategy is proving itself nicely while strength in our global markets is more than compensating for a highly promotional Caribbean."

First quarter results

Adjusted Net Income for the first quarter of 2014 was $46.1 million, or $0.21 per share, compared to Adjusted Net Income of $78.2 million, or $0.35 per share, in the first quarter of 2013. US GAAP Net Income for the first quarter 2014 was $26.5 million or $0.12 per share compared to $76.2 million or $0.35 per share in 2013.

Net Yields on a Constant-Currency basis decreased 0.3% during the quarter. Excluding the unplanned voyage disruptions, yields were slightly better than flat. Six voyages were shortened or cancelled during the quarter. The net impact from these events is expected to be recovered within the fiscal year.

Ticket revenue was in line with expectations across most key itineraries and as expected, Caribbean yields were down slightly while yields in other itineraries were up nicely. Onboard revenue yields increased 3.4% as we continue to see the benefit of our fleet upgrades and onboard revenue management initiatives.

Constant-Currency NCC excluding fuel increased 1.3% which is better than guidance mostly due to timing. Bunker pricing net of hedging for the first quarter was $713 per metric ton and consumption was 343,000 metric tons.

Full year 2014

The company has raised full year Adjusted EPS guidance slightly to a range of $3.25 to $3.45 from $3.20 to $3.40. Constant-Currency Net Revenue Yields and Net Cruise Costs excluding fuel are expected to be consistent with our previous guidance of up 2% to 3% and flat to slightly down, respectively.

Booking volumes for the past three months have been up about 16% year-over-year, with bookings for the past 8 weeks up by more than 20%, stronger than typical post-Wave periods. For example, the company experienced a record booking week at the end of February which is an unusual time for so much activity. As a result, load factors and APDs are higher than same time last year. While the promotional environment in the Caribbean has contributed to the strong booking volumes, demand has also increased for other itineraries.

Demand for European sailings from all key sourcing regions and for China sailings remained particularly strong throughout the period and double digit yield improvements are expected for both products.

"Despite pressures in the Caribbean, the diversity provided by our global footprint is proving its value. This model has allowed us to take advantage of the strong demand for our European and Asian products, while successfully navigating pressures in the Caribbean," said Jason T. Liberty, chief financial officer.

In the first quarter we continued to leverage our improving credit profile and a healthy bank market to further reduce our interest costs.

NCC excluding fuel are expected to be flat to slightly down on a Constant-Currency basis and approximately flat on an As-Reported basis. Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company has raised its 2014 guidance for Adjusted EPS to a range of $3.25 to $3.45 per share.

Second quarter 2014

Constant-Currency Net Yields are expected to increase between 1.5% to 2.5% in the second quarter of 2014. NCC excluding fuel are expected to be down 2% to 3% on a Constant-Currency basis. Based on current fuel pricing, interest rates and current exchange rates, the company expects second quarter Adjusted EPS will be in the range of $0.45 to $0.55 per share.

Princess Cruises to feature Diamond Princess in Japan 2015, Sun Princess to stay in Australia

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 22 April 2014 22 April 2014

Demonstrating a continuing commitment to developing the Japan cruise market, Carnival Corporation & plc has announced the 2015 Japan cruise program for Princess Cruises which features Diamond Princess returning for the line’s third season, and introduces new cruises as short as three nights to appeal for those local travelers seeking a quick getaway.

Beginning next April, the Japanese-built Diamond Princess will once again offer an exciting season sailing from the two home ports of Tokyo (Yokohama) and Kobe. During the four-month summer season the ship will offer 20 departures on a mix of itineraries visiting more than 20 destinations in Japan, Korea, Taiwan and Russia. The mix of itineraries is designed to have broad appeal, with cruises as short as three nights and up to 17 nights for guests seeking a more in-depth experience in Japan.

“We are very pleased to bring Diamond Princess back to Japan again next summer, this time with a broader variety of itineraries and cruise lengths offering guests a diverse choice of experiences and destinations,” said Jan Swartz, president of Princess Cruises. “In addition to offering local consumers a shorter cruise experience, our longer sailings will offer an enriching and convenient way to explore many of Japan’s most fascinating port cities.”

Swartz added that Sun Princess will not be returning to Japan next summer as it will instead be deployed to Australia where it has long been a popular ship based in the region. “Moving Sun Princess to Australia in 2015 doesn’t diminish our enthusiasm for the Japan cruise market. As demand for cruising grows further in Japan, we will review the opportunity to add additional capacity in the future.”

Diamond Princess will begin the 2015 season on April 29 in Yokohama with an eight-night Golden Week itinerary and a nine-night Taiwan & Korea sailing. The ship will then position to Kobe for a series of three cruises of Princess’ popular eight-night Ryukyu Islands & Taiwan voyages that include calls to Okinawa, Hualien, Kaohsiung and Taipei (Keelung). New for 2015 from Kobe is a 10-night Hokkaido cruise that includes appealing northern destinations of Aomori, Hakodate, Otaru and Abashiri.

Diamond Princess will return to Yokohama to spend the balance of the summer sailing north to the island of Hokkaido or around Japan, visiting culturally rich destinations such as Maizuru (for Kyoto), Nagasaki and Aomori. A special feature of the Hokkaido voyages is the late evening departure from Hakodate, which is famous for the nighttime view from the top of Mt. Hakodate, as well as the morning fish market.

Also new for the 2015 season, which runs through mid-September, are three-, four-, five- and seven-night itineraries designed to appeal to those with limited vacation time. Throughout the summer Diamond Princess will sail on a four-night Korea Getaway roundtrip from Kobe, plus a five-night Korea & Japan Getaway roundtrip from Tokyo (Yokohama) and a five-night Korea & Japan Getaway that positions between the two homeports. In August, the ship will sail on a week-long itinerary roundtrip from Yokohama which can be segmented into a three-night Korea Getaway disembarking in Hakata, or a four-night Korea & Japan itinerary embarking in Hakata.

The experience onboard Diamond Princess in Japan will substantially be the same as that offered by Princess Cruises around the world, providing an impressive array of dining and entertainment options in addition to the line’s signature innovations such as its popular Movies Under the Stars poolside theater and The Sanctuary, an exclusive top-deck retreat. However as done during the first two Japan seasons, some changes and enhancements will be made to appeal to the local market. The just-completed refurbishment of Diamond Princess added Izumi Japanese bath – the largest of its kind at sea – as well as a Kai Sushi restaurant. Photos of Diamond Princess post drydock can be found here: https://www.flickr.com/photos/princesscruises/sets/72157643606751373/

Dining room menus will offer international Princess cuisine, while additional offerings will cater to Japanese tastes, and a la carte sushi bar will be opened. Other amenities such as the spa treatments will also be tailored to Japanese preferences, and onboard collateral items and stateroom information will be translated into Japanese.

An extensive array of shore excursions will be available to complement the itineraries including opportunities to visit the UNESCO World Heritage sites.

Diamond Princess was built by Mitsubishi Heavy Industries in Nagasaki, Japan – the first of two Princess ships built in Japan.

The 2015 Japan cruise program opens for sale April 30.