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EU launches Fincantieri-Chantiers merger investigation with deep concerns

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 31 October 2019 31 October 2019

The European Commission  said it has opened an in-depth investigation to assess the proposed acquisition of Chantiers de l'Atlantique in France by the Italian shipbuilder Fincantieri, under the EU Merger Regulation.

“The Commission has preliminarily concluded that it is unlikely that a timely and credible entry from other shipbuilders would counteract the possible negative effects of the transaction,” the European Commission said in a statement.

“The transaction may therefore significantly reduce competition in the market for cruise shipbuilding, which could lead to higher prices, less choice and reduced incentives to innovate. The Commission has also preliminarily concluded that large customers would not have sufficient buyer power to counteract any risk of price increases as a result of the transaction,” it said.

Commissioner Margrethe Vestager, responsible for competition policy, said in the statement: “Demand for cruise ships is booming globally. Chantiers de l'Atlantique and Fincantieri are two global leaders in this sector. This is why we will carefully assess whether the proposed transaction would negatively affect competition in the construction of cruise ships to the detriment of the millions of Europeans taking a cruise every year."

According to the agreement between Fincantieri and the French government, would acquire a 50% stake in Chantiers de l’Atlantique, which has a large shipyard in St Nazaire, from the French state, which   also agreed to lend a 1% stake to Fincantieri to allow it to take effective control on condition the company makes commitments on jobs, governance and intellectual property, Reuters reports.

Hurricane effect shaves RCCL forecast in otherwise strong year

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 30 October 2019 30 October 2019

Royal Caribbean Cruises Ltd (RCCL), the Miami based cruise shipping group, said its 2020 earnings per share (EPS) would be higher than forecast at the publication of the second quarter report save for a negative effect of Hurricane Dorian.

“The company expects full year adjusted EPS to be in the range of $9.50 to $9.55 per share.  This range includes the negative impact of approximately $0.15 per share from Hurricane Dorian.  Excluding this impact, we are increasing the midpoint of our guidance by $0.08 per share,” the company said in its third quarter interim report. It had forecast EPS in the range of $9.55 to $9.65 in the second quarter report.

The company expects a net yield increase of approximately 8.0% in constant currency and approximately 6.75% as reported.  The company's booking strength has completely offset the negative yield impact related to Hurricane Dorian.

Net cruise costs excluding fuel per available passenger capacity day APCD are expected to be up approximately 11.0% in Constant-Currency and up approximately 10.5% as reported.  “The increase in this updated guidance is driven by the reduction in capacity and relief efforts from the hurricane together with a further increase in technology and product development investments.  These expenses are being offset by expected favorability from activities below the line,” RCCL said.

"2019 is shaping up to be another year of solid yield growth and record earnings despite some unusual headwinds," said Jason T. Liberty, executive vice president and CFO. 

"As we enter 2020, we are particularly enthusiastic about the new ship deliveries, the development of new destinations, our fleet modernization and technology initiatives.  These investments will help us deliver even greater vacations while generating higher yields and better returns," he said.

US, China drive RCCL interim profit rise

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 30 October 2019 30 October 2019

Royal Caribbean Cruises Ltd (RCCL) the world’s second largest cruise shipping group, has reported higer third quarter and nine month interim profits than last year on back of strong markets in the US and China, offsetting negative impact from Hurricane Dorian.

Group net profit rose to $890.3 million in the third quarter from $810.4 million a year earlier, while operating income rose to $890.8 million from $799.7 million. Revenues increased to $3.18 billion from $2.79 billion.

In the first nine months of the year, net profit increased to $1.63 billion from $1.49 billion and operating income to $1.78 billion from $1.53 billion. Revenues reached $8.43 billion compared to $7.16 billion year on.

"Our business continues to thrive and exceed our expectations," said Richard D. Fain, chairman and CEO in a statement.  "While Hurricane Dorian had a negative impact, stronger demand for our brands and our key itineraries exceeded our expectations.  Excluding the hurricane impact, we are not only able to maintain our yield and earnings guidance, but to raise both slightly as a result of particularly strong performance in the US and China."

The results include the negative impact of $27 million or $0.13 per share from itinerary disruptions and relief efforts related to Hurricane Dorian. and Adjusted Net Income was $836.3 million or $3.98 per share. Earnings per share rose to $4.21 from $3.88 in the third quarter.

Gross yields rose by 6.6% and net yields by 6.4% in constant currency, slightly better than guidance when considering the impact of the hurricane, which reduced revenue by $21 million and slightly reduced yields.

Gross cruise costs per available passenger capacity day (APCD) increased 7.5% in constant currency.  Net cruise costs excluding fuel per APCD were up 11.0% in constant currency terms. 

The reduction in capacity and relief efforts related to the hurricane negatively impacted this metric by 150 basis points.  Absolute costs for the quarter were significantly better than expected, due to timing.

  

 

 

Norwegian Spirit to receive $100 million upgrade in January-February 2020

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 29 October 2019 29 October 2019

Norwegian Cruise Line, the contemporary market unit in Norwegian Cruise Line Holdings Ltd (NCLH), said it would invest more than $100 million to revitalise the 1998 built Norwegian Spirit that is of 75,904 gross tons.

The ship will enter dry dock in Marseille, France on 2 January next year for a nearly 40-day renovation that is part of the line’s Norwegian Edge programme. After the refit, the ship will emerge featuring 14 new venues, additional staterooms and an expanded Mandara Spa.

New complimentary dining venues will be introduced including an additional main dining room, Taste; the 24-hour eatery, The Local Bar and Grill; the all-day dining outlet, Garden Café; the Great Outdoors Bar; and Waves Pool Bar. Making their debut are Bliss Ultra Lounge and Spinnaker Lounge, which features the Humidor Cigar Lounge. 

Splash Academy, the children’s waterpark, will be replaced with the adults-only retreat Spice H2O, a daytime lounge featuring two new hot tubs and a dedicated bar, which transforms into an after-hours entertainment venue. 

Mandara Spa will double in size to nearly 7,000 square feet and include a relaxation area with heated loungers, a new Jacuzzi room, a sauna, steam room and water therapy experience. The expansion of Pulse Fitness Center will allow guests to begin or maintain their fitness routine while at sea. The ship will also debut contemporary hull art.

In addition, the Company is announcing the introduction of Onda by Scarpetta on board Norwegian Spirit, joining the portfolio of critically acclaimed Scarpetta restaurants in New York City and the Hamptons, N.Y.; Miami; Las Vegas; Philadelphia; Newport, R.I.; London; and aboard Norwegian Encore debuting this November.

The name Scarpetta is derived from the Italian expression, 'fare la Scarpetta,' which means to savor a meal to the last bite. Onda, or 'wave' in Italian, will adapt the same ethos and bring the charm and effortless elegance of its urbane Scarpetta sister to the sea. Reaffirming the Company’s commitment to providing elevated dining experiences across the fleet, guests will enjoy the rich and bold flavors the modern Italian restaurant will be known for, including a selection of beautifully prepared seafood.

Norwegian Spirit will sail out of dry dock in February 2020 to offer cruises in the Far East, Africa and Europe, including 10 new ports of call. It will be the first in the Company’s fleet to visit Bali (Celun Bawang), Jakarta and Surabaya, Indonesia; Beppu, Kumamoto, Nagoya and Tokyo, Japan; Taipei (Keelung) Taiwan; and Yangon, Myanmar. 

Following two, 20-day cruises to Greece, Israel, Egypt and Abu Dhabi from Rome (Civitavecchia); and Seychelles, Madagascar and South Africa from Dubai; she will offer a series of destination-rich voyages to Southeast Asia, China and Japan from Singapore; Hong Kong, China; and Tokyo and Yokohama, Japan through 2020.