Tag Archives: Koningsdam

Carnival Reports Record $2.8 Billion Profit in 2016

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Carnival Corp.

By https://gcaptain.com/

Carnival Corporation, the world’s largest cruise ship company, posted a record $2.8 billion profit for its full fiscal year 2016 as the company looks towards another solid year for the cruise industry in 2017.

Carnival Corp. reported the record full year and fourth quarter earnings Tuesday. Carnival announced net income for the full year 2016 of $2.8 billion, or $3.72 diluted EPS, compared to $1.8 billion, or $2.26 diluted EPS, for the prior year.

Carnival Corp. said revenues for the full year 2016 were $16.4 billion, $700 million higher than the $15.7 billion in the prior year.

“We achieved the most profitable year in our company’s history as well as record fourth quarter earnings,” said Carnival Corporation & plc President and Chief Executive Officer Arnold Donald. “The continued execution of our core strategy to drive consumer demand in excess of measured capacity growth, contain costs and leverage our industry-leading scale resulted in our third consecutive year of significantly higher earnings and return on invested capital. The delivery of over $5 billion in cash from operations for our shareholders enabled increased dividend distributions reaching $1 billion and the investment of over $2.3 billion in the repurchase of Carnival Corporation stock.”

Highlights from the fourth quarter 2016 included the U.S. debut of Carnival Cruise Line’s Carnival Vista. Holland America’s Koningsdam also made its North American debut in November while Seabourn took delivery of ultra-luxury cruise ship Seabourn Encore.

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Seabourn Encore

During the quarter, Carnival Corp. also signed a memorandum of agreement with Meyer Werft for three new 180,000-ton cruise ships that will be powered by liquefied natural gas, the world’s cleanest burning fossil fuel. Two of the ships are for Carnival Cruise Line and are scheduled for delivery in 2020 and 2022. The third ship is designated for P&O Cruises (UK) and is scheduled for delivery in 2020. The company also signed an agreement with Shell to begin fueling its LNG-powered ships, starting with AIDA and Costa ships scheduled to launch in 2019.

Looking ahead, Carnival said it expects another solid year in 2017, forecasting adjusted earnings per share to be in the range of $3.30 to $3.60, compared to 2016 adjusted earnings per share of $3.45 in 2017.

“We are anticipating another solid year of operational improvement in 2017. Despite the unusual and significant impact of fuel and currency working against us simultaneously, the underlying strength in our fundamental business leaves us well positioned to achieve sustained double digit return on invested capital and to create continued value for our shareholders,” Donald added.

Carnival Corp.’s profit skyrockets in ‘remarkable’ Q2

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The launch of Holland America’s Koningsdam was one of Carnival Corp.’s second-quarter highlights.

Driven by higher ticket prices and fuller ships, Carnival Corp. had net income of $605 million in the second quarter, up from $222 million a year earlier.

Net revenue yields rose 3.6%, significantly higher than the range of 1.5% to 2.5% in the company’s earlier forecast.

The results came despite a currency-exchange drag and fuel price increase equal to $127 million.

“This was among the most remarkable quarters in the history of the company,” said CEO Arnold Donald, citing not only the earnings but the introduction of three new flagships (Carnival Vista, Holland America Line’s Koningsdam and the AidaPrima) and the historic launch of Cuba cruises by the new Fathom brand.

Carnival’s revenue advanced slightly to $3.7 billion from $3.6 billion.

The increase in yield was a combination of a 3.5% increase in ticket prices and a 4% rise in onboard spending, CFO David Bernstein said.

Prices for Europe cruises on Carnival’s North America brands are lower although occupancies are up, Bernstein said.

Donald positioned the decision by Britain to leave the European Union as a boost for Cunard Line and P&O Cruises because their fares in the weakened pound sterling are now more competitive with land vacations abroad for British travelers.

Bernstein said every change of 10% or more in the pound’s value has an effect of about 8 cents a share, or about $60 million, on Carnival’s full-year results.

Donald said Carnival has looked at its U.K and European forecasts in light of the Brexit vote. “At this point, we have no reason to adjust anything,” he said.

Cruise stocks, including Carnival’s, were hit harder than the market in general after the British vote. After the earnings release, Carnival shares were up more than 4% but were up less than 0.25% by 11:30 am Eastern.

Asked about the future development of Fathom, Donald said that its cruises to the Dominican Republic are geared toward a “travel segment rather than cruise,” and that Carnival’s ability to access that segment is “challenging.” He said Cuba sailings on Fathom have been successful and are very strongly booked for fall, but that there are still unsold cabins on summer departures.

Just one cruise ship scheduled to use new Panama Canal locks

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Caribbean Princess

The new, wider locks on the Panama Canal will open June 26 with the first official transit of a cargo ship, but don’t expect much traffic through them from cruise ships.

Only one cruise ship has reserved space to move through the new locks, which are open to one cruise ship a day starting in June 2017, according to the Panama Canal Authority.

Princess Cruises’ Caribbean Princess is scheduled to make a series of thirteen 10-day cruises through the canal beginning Oct. 21, 2017.

At 118 feet wide, the 3,080-passenger Caribbean Princess can’t fit into the 110-foot locks that were opened in 1914. The new locks had been scheduled to open in time for the centennial but were delayed by disputes between Panama and the consortia of contractors that built them.

The new locks rely on tugs rather than electric locomotives to move ships through them. Doubts have been raised about the ability to fit the tugs in the locks along with the longest ships, but at 951 feet, the Caribbean Princess will have room to spare in the 1,400 foot locks.

For cargo ships, questions have also been raised about the record-low depths of water in Gatun Lake, which connects locks on the Atlantic and Pacific side of the canal. Depths hit 81.75 feet earlier this year. But large cruise ships typically need only about 30 feet to operate.

Most cruise ships transiting the Panama Canal will continue to use the old locks. Cruise lines have several ships operating in Alaska that would need the new locks to move to the Atlantic, such as Royal Caribbean International’s Explorer of the Seas and Celebrity Cruises’ Celebrity Solstice. But for now they are stationed year-round in the Pacific, moving to Australia, New Zealand and the Far East during the winter.

A spokesman for Carnival Cruise Line said Carnival doesn’t have any full transit Panama Canal cruises scheduled through April 2018.

Holland America Line recently launched the Koningsdam, the first HAL ship that will not fit through the old locks, but it is currently deployed in Europe during the summer and the Caribbean during the winter.