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Regent Seven Seas Cruises in strong second quarter improvement, reports $6.5 million profit
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- Written by Kari Reinikainen Kari Reinikainen
- Category: Top Headlines Top Headlines
- Published: 09 August 2013 09 August 2013
Regent Seven Seas Cruises (RSSC), the luxury cruise line in the Prestige Cruise Holdings group, has staged a string improvement in results in the second quarter. The company reported net profit of $6.5 million compared to a loss of $3.8 million in the same period last year.
Revenue reached a record $142.7 million for the second quarter of 2013, an increase of 8.6% over the second quarter of 2012 on a 5.4% increase in capacity due to the Seven Seas Navigator scheduled dry-dock in 2012. Adjusted EBITDA was a record $28.5 million for the second quarter of 2013, compared to $19.4 million for the second quarter of 2012. Net Yield for the second quarter of 2013 increased 3.9 percent to a record $521.24 from $501.68 in 2012.
In July, the Company announced that it entered into a definitive contract with Italy's Fincantieri shipyard to build a 738 guest vessel at an approximate cost of $450 million with delivery scheduled in summer 2016. Named Seven Seas Explorer, the Company expects the vessel will be the most luxurious cruise ship built in the modern era of cruising.
On July 31, 2013, we entered into a loan agreement providing for borrowings of up to $440 million with a syndicate of financial institutions to finance 80% of the contract cost of Seven Seas Explorer plus the export credit premium.
Borrowings under this loan agreement bear interest, at our election, at either (i) a fixed rate of 3.43% per year, or LIBOR plus 2.8%. The twelve year fully amortizing loan requires semi-annual principal and interest payments commencing six months following the draw-down date.
Commenting on the second quarter financial results, the Company's Chairman and CEO, Frank Del Rio, stated, “We are pleased to have reached record Revenues, Adjusted EBITDA, Net Yield and Net Income for the second quarter. These results continue to affirm our all-inclusive luxury offering. In looking to the future, we recently announced a contract for Seven Seas Explorer, which will set the standard for luxury cruising. The all-suite, all-balcony ship will feature sophisticated designer suites ranging from 300 square feet to 1,500 square feet with one of the highest space ratios and staff-to-guest ratios ever seen.
The ship will include six open-seating gourmet restaurants, Regent's signature nine-deck atrium, the two-story Explorer Theater, three boutiques and an expansive Canyon Ranch SpaClub. Operationally, the vessel will be a green ship, employing the most advanced environmental systems and state-of-the-art technology. With this addition to the fleet, the Company's capacity will grow nearly 40 percent, making it the world's largest luxury cruise line."
Norwegian’s principal shareholders to cut stake in company by offering 20 million shares
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- Written by Kari Reinikainen Kari Reinikainen
- Category: Top Headlines Top Headlines
- Published: 08 August 2013 08 August 2013
Norwegian Cruise Line Holdings Ltd says it has announced the launch of a secondary public offering of 20 million of its ordinary shares by its principal shareholders, Star NCLC Holdings Ltd. and certain funds affiliated with Apollo Global Management, LLC and TPG Global, LLC pursuant to a registration statement filed with the U.S. Securities and Exchange Commission.
The selling shareholders will grant the underwriters a 30-day option to purchase an aggregate of up to 3 million additional ordinary shares. Norwegian will not sell any ordinary shares in the offering and will not receive any of the proceeds from the offering.
UBS Investment Bank and Barclays are acting as bookrunners and the representatives of the underwriters for the offering. Citigroup, Deutsche Bank Securities, Goldman, Sachs & Co. and J.P. Morgan are also acting as bookrunners for the offering. Credit Agricole CIB, DNB Markets, HSBC, SunTrust Robinson Humphrey and Nomura are acting as co-managers for the offering, the company said in a statement.
Hapag-Lloyd Kreuzfahrten more than doubles TUI AG cruise losses
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- Written by Kari Reinikainen Kari Reinikainen
- Category: Top Headlines Top Headlines
- Published: 08 August 2013 08 August 2013
Poor performance of its Hapag-Lloyd Kreuzfahrten unit has more than doubled the operating losses of cruise operations of TUI AG, the German travel group in nine months to 30 June, offsetting continuing good development of TUI Cruises.
Turnover in TUI AG’s cruise sector rose to €188 million from €162 million year on. “This growth was mainly driven by the expansion of the fleet to include MS Europa 2 (since May 2013), TUI AG said.
However, operating loss of the sector deepened to €18 million euros from €8 million in the corresponding period a yearearlier.
“The decline was exclusively attributable to the weaker performance of Hapag-Lloyd Kreuzfahrten. Earnings were impacted by start-up costs for the fleet expansion and damage resulting from a fire during a dry dock period,” TUI AG said in a statement.
Hapag-Lloyd Kreuzfahrten recorded a decline in occupancy of 4.6 percentage points to around 71% The average rate per passenger per day climbed by around 8% from €377 to €409. Hapag-Lloyd Kreuzfahrten operates in the luxury and exploration segments of the cruise industry.
In the period under review, TUI Cruises continued its positive development. “TUI Cruises achieved an increase in occupancy of 1 percentage point to 100%. The average rate per passenger per day grew by around 3% from €142 to €147, TUI AG said.
TUI Cruises is a premium market cruise operator, in which TUI AG has a 50% stake, while Royal Caribbean Cruises Ltd owns the other 50%.
NYK cuts cruise losses, forecasts return to profit in current financial year
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- Written by Kari Reinikainen Kari Reinikainen
- Category: Top Headlines Top Headlines
- Published: 07 August 2013 07 August 2013
Nippon Yusen Kabushiki Kaisha (NYK), the Japanese shipping giant that owns NYK Cruises in Japan and Crystal Cruises in Los Angeles, has reduced losses from its cruise operations in the financial year to 31 March 2013and forecasts return to profit in 2014.
The cruise operations produced a recurring loss of JPY3.7 billion in the review period, a reduction from a JPY5.8 billion loss year on. Revenues increased to JPY35.0 billion from JPY32.4 billion, NYK said in its annual report.
NYK is forecasting a profit of JPY1.0 billion on revenues of JPY43.0 billion for the 2014 financial year that started on 1 April, it said in the report.
“In the North American market, Crystal Cruises sales of Mediterranean voyages declined as a result of turmoil in Southern Europe stemming from financial instability as well as political tension in the Middle East and North Africa,” NYK said.
“In the Japanese market, Asuka Cruises business rebounded strongly from the previous fiscal year, when the Great East Japan Earthquake severely impacted results. Overall, the cruises segment narrowed its loss on higher revenues compared with the previous fiscal year,” NYK pointed out.
NYK outlines strategy changes to grow cruise business
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- Written by Kari Reinikainen Kari Reinikainen
- Category: Top Headlines Top Headlines
- Published: 07 August 2013 07 August 2013
NipponYusen Kabushiki Kaisha (NYK), the Japanese shipping giant that owns NYK Cruises that focuses on the luxury market in Japan and Crystal Cruises that caters for the international luxury market, has revised its strategy to grow its cruise brands, while arrival of Princess Cruises on the Japanese market does not scare the company, says Masahiro Samitsu Chief Executive of Cruise Headquarters Director, Managing Corporate Officer.
However, he would like to see Japanese registered cruise ships to “enjoy level playing field” with non-Japanese ships in terms of cost base.
“Serving Japan’s market, NYK Cruises Co. Ltd. has seen a shift in sentiment thanks partly to recoveries in the domestic stock market and economy as the yen weakens. In fiscal 2012, reservations were brisk. Moreover, since the beginning of 2013 the pace at which we are receiving reservations has definitely picked up even further, “ Samitsu said in NYK’s annual report published in early August.
“Meanwhile, our subsidiary operating in overseas markets, Crystal Cruises Inc., has also seen reservations trend upward. In fiscal 2012, the repercussions of a cruise ship running aground in Italy dealt a severe and unexpected blow to Mediterranean cruises, which had been the subsidiary’s revenues mainstay. However, we have been receiving reservations for all our products at an unprecedented rate since the beginning of 2013.”
The group has revised its sales strategy in two respects. “First, we have changed pricing. We lowered the launch prices of all the cruise products Crystal Cruises offers. And, we adopted a system of reviewing these prices every two months. We raise the prices of products for which reservations are favourable every two months while keeping products with soft reservations at their launch prices. This produces a synergy benefit that steadily boosts reservations for initially sluggish products because their prices appear increasingly reasonable as the prices of popular products rise,” Samitsu explained
“Further, we are setting prices to reflect the value of each product. For example, our new, attractively priced shorter cruises that offer the same service quality as our other cruises have become popular with customers.”
“The other important change in our sales strategy is a renewed emphasis on expanding sales channels. In the United States, we are expanding our network with a view to having more travel agents carry the products of Crystal Cruises. Also, in Japan we are urging travel agents that sell our Asuka II cruises to increase the numbers of agencies carrying the cruises and dedicated personnel. Already, this strategy is helping boost reservations.”
In Japan, Princess Cruises has entered the market there for the first time and operates Sun Princess in the country and another vessel will join it in 2014. “Because we offer products for the luxury market, I do not think its entry will mean major competition for us. On the contrary, we hope this new development will broaden our customer base,” Samitsu commented.
The cruise market in the United States accounts for roughly 10 million people, or about 3% of its population. By contrast, Japan’s market only represents 0.2% of the population. “The U.S. market has matured to this extent because the participation of a variety of cruise ships has formed the market. I believe the opening of Japan’s market for the first time to cruise ships targeting the general public could popularise reasonably priced cruises, which in the long term will have the beneficial effect of creating demand for luxury cruises.”
“On the other hand, Japanese cruise ships have less cost- competitiveness than their non-Japanese counterparts. This is because Japanese cruise ships are subject to strict regulations under Japanese law requiring annual vessel inspections, while non-Japanese cruise ships are inspected twice every five years. Furthermore, regulations limit the number of non-Japanese crew members permitted to work on Japanese cruise ships. Therefore, we want authorities to ease regulations so that Japanese cruise ships can compete on a level playing field with non-Japanese cruise ships,” Samitsu pointed out
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