STX Europe sees gradual brightening of cruise ship newbuilding activity

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 15 November 2012 15 November 2012

Tough market conditions in the Cruise & Ferry business area of STX Europe, the Oslo based shipbuilder whose owner is the South Korean STX Business Group, although some brightening of the outlook emerged in the course of the latest quarter.

 “Market conditions in the third quarter remained challenging. However, during the last couple of months several new cruise vessel orders have been placed and there are potential for other new building projects in the market,” the company said in a statement.

“While the larger cruise operators have better access to financing, others need longer time to secure funding for their new building projects in the current market and economic situation. At present activities in the ferry segment are particularly low and are expected to increase only as the economic outlook will improve.”

“Both STX Finland and STX France are strongly focusing on securing new orders and continue with the improvement programmes to improve competitiveness. This includes also increased efforts within certain other market segments such as vessels for naval operations as well as offshore and renewable energy/wind related deliveries,” the company said.

 The Cruise & Ferry business area generated an EBITA negative by NOK 39 million in the third quarter compared to a positive figure of NOK 50 million in the same period last year. For January-September, the fresh figure was NOK 150 million in the red compared to NOK 20 million in the black a year earlier. Operating revenues remained fairly stable year on in both review periods, but order intake plunged to NOK 434 million in the nine month period from NOK 10.0 billion a year earlier. A recent order for a 99,300 gross ton ship from TUI Cruises at STX Finland is not included in the January-September figures.

STX Europe repeated that it is committed to remaining a world leading shipbuilder of cruise vessels and ferries through securing new orders. “The focus in ice- breaking/arctic tonnage remains a key strategic focus, predominantly in Finland.” The continuing main focus of STX Europe is to secure new orders and continue to improve its profitability and competitiveness, especially within the Cruise & Ferries business area. The business area will further develop its diversification into other market segments such as offshore and renewable energy related deliveries.

The cruise vessel market remains challenging, but there are some signs of gradual improvement. Several new orders have recently been placed and there are a few other potential new building projects currently in the market. However, competition is very tough and some operators are still constrained by the limitations of financing of projects in today’s economic climate. The continuation of solid expansion in cruise business will, however, secure the market for further contracting of newbuildings.

 In September 2012, a sand dredger was delivered from the Lorient shipyard. The order book at the Saint-Nazaire yard at the end of the quarter consists of two cruise vessels, one for Hapag Lloyd and the other for MSC, and two Mistral class helicopter carriers to be delivered to the Russian defense export agency Rosoboronexpor. The order book at the Rauma shipyard at the end of the third quarter consisted of a double-ended ferry for Finferries and an offshore patrol vessel for the Finish Border Guard. The order book at the Turku shipyard at the end of the quarter consisted of a large cruise ship for TUI Cruises and a cruise ferry for Viking Line.

The order book for Arctech Helsinki Shipyard (‘AHS’) at the end of the quarter consisted of a multipurpose emergency & rescue vessel and two multifunctional icebreaking supply vessels for a Russian owner. 

 

Project Orient aims to restore UK-Australia liner service

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 09 November 2012 09 November 2012

A new company that has been set up in the UK plans to introduce two vessels of about 100,000 gross tons to reopen a regular passenger liner service between the UK and Australia.

 Project Orient Limited, which is the new company, includes former Fred. Olsen Cruise Lines’ director of marketing Nigel Lingard as a non-executive member of its board.

“If we look at the volumes of travel between North Western Europe and Australasia, we would need to grab less than 1% of the total to make this economically viable,” Lingard told Cruise Business Online.

The aim is to maintain a monthly service around the year to both directions, but itineraries could vary, from the shortest way via Capetown to Fremantle and then on to Sydney, to sailings via the Suez Canal with calls perhaps including Dubai, India and Singapore. Some sailings might also head via Panama, Lingard said, adding that rouring would depend on e.g. customer demand.

 The Project Orient team has not finance in place at the moment to place orders for the planned ships and Lingard says finding the principal equity investors is a key task that the board is facing at the moment. Middle Eastern wealth funds are seen as potential investors in the company, he added.

 At the moment, several ships sail on world cruises from Britain to Australia each year and sections of these cruises can be bought as liner voyages in both directions. However, virtually all sailings depart from the UK in January and because they are sold cruises rather than liner voyages, they include calls at several ports en route, which means that they often take twice the 25 days that Project Orient plans its ships to need for the voyage.

Lingard says that initial talks with travel agents have suggested that there is an interest in this kind of product. The ships would need to make about 25 knots to meet the required voyage time of 25 days. This again that they would have to be highly fuel efficient in design, Lingard pointed out.

Project Orient team hopes to start the service in four years’ time.

There was a regular liner service from the UK to Australia from 1852, when P&O started the run with a small steamship called Chusan, until 1977, when the Greek-owned Chandris Lines retired the 1940 built Australis from the service. The ship had been built as America in 1940.

P&O operated the service up to 1973 and its last newbuildings for the route, the 45,733 gross ton Canberra (1961) and 41,923 gross ton Oriana (1960, not to be confused with the present ship of the same name), made the voyage in about three weeks at an average speed of 27.5 knots.