Top Headlines

GPH losses widen, issues profit warning as cargo ports extend drag

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 11 December 2019 11 December 2019

Global Ports Holding (GPH), the world’s largest operator of cruise ports, has reported a much wider nine mont loss than last year and issued a profit warning by saying that its cargo facilities continue to underperform and outweigh the positive development of its cruise facilities.

“As a result of the weakness in our Commercial ports, we now expect the Group to deliver for the full year a decline in Consolidated EBITDA in percentage terms of mid-single digit against 2018,” said the company that is headquartered in Istanbul and listed in London, in a statement.

Group net loss in the first nine months of the year widened to $14.8 million from $0.1 million year-on, while revenes fell by $3.0 million to $91.5 million.

“During Q3 2019 we announced that in light of the emerging opportunities in our cruise business that we were undertaking a strategic review of the Group. The process is currently expected to conclude in Q1 2020, however there can be no certainty as to the final outcome. A further announcement will be made when it is appropriate to do so,” GPH said.

Although the company has not explicitly said so, the review could result in disposal of the cargo ports that hurt the company’s performance for some time now.

Revenue from the cruise operations of the company rose by 11.2% to $46.2 million and EBITDA by 13.9% to $32.6 million in the first nine months, year on.

Revenue from the two cargo facilities, however, fell by 14.4% to $33.7 million and EBITDA by 19.5% to $33.7 million in the first nine months of the year.

“Our Cruise business continues to perform well in Q4 2019 and looking into 2020 and 2021, organic growth is expected to be strong driven by a significant increase in passengers at both Ege and Bodrum. The recent addition of Nassau and Antigua cruise ports to our cruise portfolio is a truly transformational for the group. Cruise passenger volumes for 2020 will increase by close to 100% and we expect to deliver in excess of $85m of EBITDA from our Cruise business by 2022, a growth rate of in excess of 100% from 2018 levels,” GPH stated.

“As expected, macro-economic factors such as trade tariffs continued to negatively impact our Commercial business in Q3, particularly Port Akdeniz. Throughput container volumes were once again weak in the period and this sustained weakness has continued into Q4. Longer term an agreement to end the current escalation of trade tariffs involving China and a general improvement in Chinese GDP are, we believe, the most likely catalysts for a meaningful improvement in container throughput volumes,” the company said.

National Geographic Endurance floated out in Ulstein Werft, Norway

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 10 December 2019 10 December 2019

Lindblad Expeditions Holdings Inc. celebrated the float out of National Geographic Endurance in Ulstein Verft, Norway on Saturday, December 7, 2019. The first polar new build for the line, the 126-guest vessel is fully stabilized with the highest ice class (PC5 Category A) of any purpose-built passenger vessel. Key to its design is the patented X-BOW - its powerful wave-slicing action will provide an extremely smooth ride in even adverse conditions, which results in greater fuel efficiency and fewer emissions for reduced environmental impact.

The vessel is scheduled for delivery in January 2020.

MV Werften lays the keel of second Global-class ship, starts construction of new Universal-class

Details: Written by Teijo Niemelä Teijo Niemelä; Category: Top Headlines Top Headlines; Published: 09 December 2019 09 December 2019

The keel-laying of the second 208,000 gross ton Global Class ship for Dream Cruises took place today at MV Werften in Rostock. The midship section of the Global-class ship is being produced in Rostock. The transfer of the first 160,000 gross ton midship section for the first Global-class ship – the Global Dream – from Rostock to the covered dock of Wismar was completed only two weeks ago. At 235m long and 20 decks high, the mid-section was the largest man-made ship structure to be towed from one location to another.

The keel-laying for the second Global-class ship was attended by guests from the State and Federal Government, business leaders as well as media representatives from Germany and Asia. Western- Pomerania’s Economics Minister Harry Glawe, Genting Hong Kong’s Chairman and CEO Tan Sri KT Lim, Deputy CEO Hui Lim, Group President Colin Au, Genting Cruise Line President, Kent Zhu, Dream Cruises President Michael Goh and MV Werften’s CEO Peter Fetten. All participants placed the traditional lucky coins on the keel block before the 95m high gantry crane lowered the 470ton section into position.

“We are here for the keel laying of the second Global-class ship,” said Tan Sri KT Lim, “But more importantly, we are starting the design and building of the next series of ships, the Universal-class ships, the first to be delivered by the end of 2022.”

Cruising is a niche with 2.5% market share of the travel industry and marketed often as an alternative to land vacation. The Universal-class ships, on the other hand, are designed, built and operated with “Complete Freedom” – making cruising more like a land vacation. At 88,000 gross tons in size and 2,000 guests, the ships are large enough to have all the main amenities of larger cruise ships but without the crowded public space and lines of 5,000+ passenger cruise ships. Genting will operate the Universal-class ships for global hotel brands, who want to enter the cruise industry, but are unable to do so as almost all building slots are occupied till the end of the decade.

“The major hospitality brands are uncompromising in protecting their brand image and the Universal-class ships are perfect as they carry the most trusted and respected “Made in Germany” label. They are designed with the highest safety and environmental standards, including LNG propulsion”, says Peter Fetten, President and CEO of MV WERFTEN. “We will be an experienced yard by then, having delivered two 208,000 gross tons Global Class ships, the largest to be built in Germany and the Universal-class ships will keep MV Werften with a full orderbook till 2024.”

SeaDream, Damen terminate newbuilding project

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 03 December 2019 03 December 2019

SeaDream Yacht Club, the US based operator of two 4,200 gross ton cruise yachts, and the Dutch shipbuilding group Damen have decided not to proceed with the building of a15,600 gross ton ship for SeaDream. “Both parties are open to potential future projects and collaboration. The new ship, SeaDream Innovation, was scheduled to be delivered in September of 2021,” SeaDream said in a statement.

“The response from our past guests and the market in general has been overwhelming, despite the ship not being scheduled for delivery for almost two years,” said Andreas Brynestad, Executive Vice President. “Since the ship will not be delivered, all booked guests will be contacted and issued full refunds in the coming days.”

SeaDream is actively pursuing other newbuild opportunities. Atle Brynestad, SeaDream Owner and Chairman, said, “The company has been debt free for several years and has the equity needed to expand the fleet. We hope to announce a new ship in 2020.”

The existing two ships, SeaDream I and II that were both built in Finland in the mid-1980s, continue performing well, with the company seeing record revenue years. Current plans of refurbishing the suites on SeaDream I and II will proceed as previously announced and planned – starting with SeaDream II in spring 2020.

The Damen group has set up a unit in Helsinki, Finland, to facilitate its break into the cruise ship building business. The now canceled SeaDream Innovation was the first cruise liner newbuilding contract for the company.

Damen offers a wide range of products that ranges from luxury yachts to ferries and naval vessels. It has also a foothold in the cruise ship refurbishment sector.

Comment: CMV delivers on growth strategy

Details: Written by Kari Reinikainen Kari Reinikainen; Category: Top Headlines Top Headlines; Published: 29 November 2019 29 November 2019

Cruise & Maritime Voyages (CMV), the UK based destinational operator that has foothold in many source markets, has delivered on its previously announced expansion plans as it on 28 November unveiled the acquisition of two ships from P&O Cruises Australia.

CMV intends to keep all of its existing six vessels, when the present day Pacific Dawn will join its UK fleet and Pacific Aria its TransOcean Kreuzfahrten unit in Germany in the summer of 2021.

Degree of homogeneity emerges

Pacific Dawn was built as the final unit in a series of three ships delivered to Princess Cruises in 1989-91 and it is a near sister of Columbus, built as Star Princess as the first unit of the class in 1989.

Pacific Aria is a Statendam class ship built for Holland America Line in 1994 and a sister ship of Vasco da Gama, which CMV acquired from P&O Cruises Australia, and introduced on the German and Australian markets earlier this year.

This is interesting as CMV has been able to build a certain degree of homogeneity through acquisitions of second hand tonnage. If we look several to the past, this was often very difficult to achieve due to the fact that long series of ships were not really built before the 1990s. Now ships of this vintage are available on the second hand market.

CMV’s expansion has not meant just more ships: the 1987 built 21,000 gross ton Astor will be introduced on the French market under a French brand in two years’ time. The company already has foothold in the US, Australia and Mexico as well, although the UK and Germany generate 85% of its passengers, according to company officials.

As orderbooks for cruise ship newbuildings are at a record high level, with more than 100 ships contracted, good quality tonnage built in the 1990s and son probably also early in the new decade can be expected to become available on the second hand market.

Little activity on second hand market

Against this background, it is perhaps surprising that only Marella Cruises, the UK focused line in the TUI AG group, has actively purchased second hand ships in recent years.

It has added two former Vision class ships of Royal Caribbean International and two Century class vessels built for Celebrity Cruises, all of mid-1990s vintage, since it started its fleet renewal in 2016.

It has stated that the remaining two, pre-1990 ships should also be replaced by newer and probably larger tonnage in the next few years.

Although Marella Cruises has increased its capacity by introducing larger vessels, the number of ships in its fleet has not grown as the new, owned acquisition have replaced older, chartered in tonnage.

The cruise market is quite consolidated and although several good quality vessels could available for purchase, it is difficult to launch a new cruise brand.

It would have to differ from existing offerings in a meaningful way, yet it should not be too narrow in its appeal to be commercially viable.