Tag Archives: Carnival Corporation

Japan’s MHI Scuttles Cruise Shipbuilding Plans After Losses on Carnival Ships

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The AIDAPrima was delayed several times at MHI before its delivery in March 2016, more than a year behind schedule. d

The AIDAPrima was delayed several times at MHI before its delivery in March 2016, more than a year behind schedule.

TOKYO, Oct 18 (Reuters) – Japan’s Mitsubishi Heavy Industries Ltd has abandoned its ambition to build European cruise liners and will stick to making smaller ferries and other medium-sized passenger ships after racking up losses on a venture to build two large vessels.

Mitsubishi Heavy Industries (MHI), Japan’s No.4 shipbuilder, booked 238 billion yen ($2.3 billion) in extraordinary losses in the three business years ended March 31 due to cost overruns and delays in the construction of two 100,000-ton class cruise liners for Europe’s Carnival Corp.

“We thought we could somehow manage it, but it showed us that we need a stringent decision making process and risk management, MHI Chief Executive Officer Shinichi Miyanaga said at a press briefing in Tokyo on Tuesday.

The construction of the vessels for Carnival was plagued by faulty engines, late design changes and onboard fires. That delayed delivery by more than a year and increased construction costs for the first of the two liners by almost four times to nearly $2 billion, MHI said in a report.

In the future, MHI’s passenger ship unit will build smaller vessels, such as 40,000-ton cruise ferries, that it can manage with its current workforce and domestic supply chain.

Currently, more than 90 percent of the world’s cruise liners are built in European shipyards.

MHI is more skilled at building merchant vessels, mainly liquefied natural gas carriers.

Earlier this month, a media report said MHI was downsizing its shipbuilding operations due to a slump in orders. Shipyards worldwide, including in Japan, South Korea and China, have been hurt by a slump in demand as a result of oversupply.

Global orders last year fell to 2,197 ships from 2,888 in 2014, according to the Shipbuilders Association of Japan. (Reporting by Tim Kelly; Editing by Chris Gallagher and Himani Sarkar)

Mitsubishi Heavy to Shrink Shipbuilding Operations -Report

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The AIDAPrima built by Mitsubishi Heavy Industries.

The AIDAPrima built by Mitsubishi Heavy Industries.

TOKYO, Oct 9 (Reuters) – Japan’s Mitsubishi Heavy Industries is planning to stop taking new orders for large passenger ships, downsizing its shipbuilding operations due to a slump in orders, the Nikkei newspaper reported on Sunday.

The plans by Japan’s fourth-largest shipbuilder come as new shipbuilding orders have declined 80 percent so far this year, the Nikkei said. Citing unidentified sources, it said the company was considering splitting off its planning and design division and sharing shipyards with other companies.

A spokesman for Mitsubishi Heavy, which also builds aircraft and defence equipment, said the report was not based on information provided by the company and declined further comment.

Mitsubishi Heavy took a 103.9 billion yen ($1.01 billion) loss on its cruise ship construction operations in the year ended March, having delayed the delivery of a cruise ship produced for Carnival Corp by more than a year.

The Nikkei said Mitsubishi Heavy was planning to reduce risks in its shipbuilding operations by focussing on building smaller ships, which have simpler specifications. ($1 = 102.9000 yen) (Reporting by Naomi Tajitsu; Editing by Paul Tait)

(c) Copyright Thomson Reuters 2016.

Carnival Corp reports strong forward bookings following record summer

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Overall forward bookings for Carnival Corporation cruise brands for the first half of 2017 are ahead of the same time last year at “considerably” higher prices.

The disclosure from the world’s largest cruise line conglomerate – which accounts for 10 lines including P&O Cruises and Cunard – came as it projected profit growth of almost 25% this year.

The group reported net income for the three peak summer months to August 31 up to $1.4 billion from $1.2 billion in the same period last year.

President and chief executive Arnold Donald said: “We delivered the strongest quarterly earnings in our company’s history affirming our ongoing efforts to expand consumer demand in excess of measured capacity increases and leverage our industry leading scale.

“Revenues during the peak summer season were bolstered by strong performances from both our North American and European brands and across all major deployments including the Caribbean, Alaska and Europe.”

Looking forward, the company said: “At this time, cumulative advance bookings for the first half of next year are ahead of the prior year at considerably higher prices.

“Since June, booking volumes for the first half of next year are lower than the prior year, as there is less inventory remaining for sale, at significantly higher prices.”

Donald added: “We are well on track to deliver nearly 25% earnings growth in 2016. With cash from operations expected to reach a record $5 billion this year, we continue to fund our growth and return cash to shareholders.

“Looking forward, we are well positioned for continued earnings growth given the current strength of our booking and pricing trends in 2017.”