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Articles from 2003 In January


UBS, AGE adjust Royal Caribbean estimates

UBS, AGE adjust Royal Caribbean estimates

Edwards adjusted estimates for Royal Caribbean downward after the company's earnings report, and both are maintaining their Buy rating. Royal Caribbean estimates net yields will be up 2%-4% in the first quarter, but both UBS and AGE view that as optimistic.

UBS predicts only partial recovery in net yield during 2003: an uptick of 1.5%. 'If Q1 comes in with net yields up 4%, then RCL is on its way to the partial recovery we look for in '03 yields,' writes analyst Robin Farley.

UBS is lowering its 2003 estimate to $1.95 from $2.08 to partially account for the additional cancelled Infinity cruise but in larger part due to higher expenses this year. UBS's price target based on 12x forward EPS goes to $23 from $25. 'While management indicated it is comfortable with the consensus figure of $2 in EPS, we may be more cautious than management about yield increases in 2003. Separately, we are establishing our EPS estimate for 2004 of $2.18, which assumes flat yields in 2004,' Farley notes.

AGE sees Royal Caribbean's earnings progress as limited in the first quarter given higher fuel, insurance and marketing costs plus the inclusion of the Brilliance of the Seas operating lease. AGE is reducing 2003 and '04 estimates to $1.83 from $2.10 and to $2.45 from $2.55 respectively and maintaining a 12-month price objective of $27. 'We believe that if the pending war with Iraq is speedily and positively resolved, consumer confidence will quickly rebound producing higher year-over-year pricing and nicely positive YoY yields,' writes analyst Tim Conder.

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Giorgi reveals plans for Minerva

Giorgi reveals plans for Minerva

Swan Hellenic is returning the 352-passenger vessel to replace her with ex-Renaissance R Eight - to be rechristened Minerva II - chartered from Cruiseinvest.

As previously reported, Saga, the UK travel-to-insurance group catering exclusively for the over 50s, is taking the original Minerva on a 210-day, May to November charter, initially for three years. To be renamed Saga Pearl, the vessel will cruise in European waters with mostly UK passengers. V.Ships has been retained to provide deck and engine management, informs Giorgi, while Saga will take care of hotel services.

New development is the winter arrangements when the vessel will trade in Antarctic waters, under V.Ships full management. Sales and marketing will be carried out by a combination of Radisson Seven Seas Cruises - with which Vlasov jointly owns a series of luxury vessels - and Abercrombie & Kent.

'It's not a time charter,' explains Giorgi, 'Rather the two entities have agreed with Vlasov to guarantee so many berths per day.' With twin homeports in Ushuiaia and Port Stanley (Falklands), the vessel will conduct a series of nine pendulum cruises lasting between 10 and 16 days.

'Just a few years ago, Antarctica and the West Chilean fiords were very exotic destinations,' he adds. Now, 'with the current international politicial situation they are becoming increasingly popular,' he says, 'a trend I think will continue.'

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AAPA seeks proposals for terminal study

AAPA seeks proposals for terminal study

The purpose of the document will be to show government officials and other relevant parties the impact that federal inspection requirements are having on terminal operatons and costs, as well as to provide recommendations for improvements.

The AAPA is requesting brief letter proposals from consulting firms. A list of specific criteria is available from the organisation's Alexandria, Virginia office (tel: 703-684-5700; [email protected]). Submissions are due not later than February 10. It is expected that a contract will be awarded by February 18.

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Royal Caribbean: no plans to match NCL

Royal Caribbean: no plans to match NCL

Lisa Bauer, senior vp of North American sales for Royal Caribbean International and Celebrity Cruises, tells Seatrade Insider her companies base agent pay on revenue targets, not passenger numbers. [NCL's plan hinges on agents doubling their passenger count; for those who don't, air commissions will drop from the 10% NCL presently pays to the 5% industry standard.]

'Our shareholders are interested in not about how many people you carry but at what yield,' Bauer says. '[NCL's plan] looks like an air commission cut for people. We're already at 5%.'

Bauer reports few or no agent calls for Royal Caribbean to match NCL. 'It was a great PR move for NCL to talk about what for most people would be a commission cut,' Bauer maintains. 'The agents who sit down and do the math really understand that.' [For NCL's position, see earlier stories.]

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Expanded Smallwoodapos;s sets open house

Expanded Smallwoodapos;s sets open house

An open-house reception is planned from 4 to 7 p.m., February 7, at 1001 SE 17th Street.

In addition to an expanded retail showroom nearly three times larger than its previous space, the complex also houses production facilities for graphic arts, tailoring, machinery, shipping and receiving, and offices for management, sales, accounting and customer service. The new showroom displays classic and custom crew uniforms and logowear; a boutique collection of upscale cruise apparel and sportswear plus accessories including epaulets, gold-braid custom crests, flags, hats, footwear, belts and ties.

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Princess publishes apos;culinary journeyapos; book

Princess publishes apos;culinary journeyapos; book

The book is priced at $49.95 but sells on board for $35.

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Princess break fee buoys Royal Caribbean

Princess break fee buoys Royal Caribbean

3m (20 cents per share) compared to a net loss of $39m (-20 cents per share) in 2001.

Earnings were better than expected due to a stronger than anticipated yield performance. Net yields were up 10.6% compared to previous guidance of 7%-9%. Net yields for the full year were 0.7% below 2001 levels. 'Obviously, the fourth quarter of 2001 was greatly impacted by the aftermath of 9/11,' said Royal Caribbean acting cfo Bonnie Biumi. 'Nevertheless, a double-digit yield improvement in the face of a double-digit capacity increase amply demonstrates the strength of our brands.'

Net income for the full year 2002 was $351.3m ($1.79 per share), compared to $254.5m ($1.32 per share) in 2001. Besides the proceeds from the Princess break fee, 2002 results include a $20m charge (10 cents per share) related to a litigation settlement over alleged unpaid crew wages. Excluding the impact of these items, net income for 2002 would have been $338.3m ($1.72 per share). Revenues for the year were up 9.2% at $3.4bn, compared to $3.1bn in 2001. The increase in revenues was due to a 15% increase in capacity, partially offset by the 0.7% decline in yields and a decrease in the air/sea mix from 24% in 2001 to 14.2% in 2002.

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Fain: wave bookings slower than hoped

Fain: wave bookings slower than hoped

' A few weeks into wave period, Fain commented in today's earnings release that 'While this period continues to be an important booking period, the trend towards closer in bookings has reduced its importance as an indicator of full-year patterns while making it even more relevant for first-quarter bookings.

'Bookings over this period have been slower than we had hoped to see especially for sailings earlier in the year. We believe that this is due to uncertainty about a potential conflict in Iraq coupled with a weaker economy and the impact of last December's publicity concerning stomach flu onboard certain vessels.'

While wave bookings are lower than last year, Fain added, 'we had very strong bookings through late 2002 and we do not have the hole created by September 11th to fill. As a result, the company expects to achieve an increase in net yields for the first quarter in the range of 2-4%.' If the company is able to achieve 'a modest increase' in net yields for 2003, Fain said the current consensus full-year estimates of approximately $2 per share are reasonable.

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Families OKapos;d to sue Windjammer in US

Families OKapos;d to sue Windjammer in US

As today's Miami Herald reports, the ruling reverses a district court decision last year that directed families to file claims in Panama, where the subsidiary that owned Fantome is registered. The Herald says Windjammer is considering an appeal to the US Supreme Court.

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Celebrity ends Infinity cruise early

Celebrity ends Infinity cruise early

The vessel will head for pod bearing repairs at San Francisco or Victoria, Williams said. He added that cutting the present cruise short could result in a greater earnings impact than the 3 cents to 4 cents originally estimated by Royal Caribbean based on the cancellation of 21 upcoming cruise days. Williams still expects Infinity to resume service on February 23 from San Diego.

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