New Ship Expected To Generate More Than $30M For AMCV

Friday, August 20, 1999
The new ship to be purchased by American Classic Voyages from Carnival Corp. is expected to generate $35-40 million of cash flow for the company, and incremental earnings power could top $.50 a share, according to a report released by Lazard Freres & Co. LLC. AMCV announced last week an agreement to acquire the 1,214 berth Nieuw Amsterdam from Carnival for $114.5 million. The ship will be delivered to AMCV in October of next year, at which time the company will launch its new Hawaiian cruise service. American Classic plans to re-document the Nieuw Amsterdam as a U.S. flag vessel, with a U.S. crew, to sail the Hawaiian Islands as part of its Project America. The Nieuw Amsterdam will be the only large foreign flag cruise ship allowed to operate a domestic cruise service. Although few details have been released regarding financial arrangements with carnival, analysts from Lazard Freres believe that seller financing may be available from Carnival, which “currently has the high quality problem of how to employ about a billion dollars of cash sitting on its balance sheet,” the report said. “Considering Carnival’s current P/E, which is north of 25x, we would be surprised if they weren’t willing to provide credit at 300-400 bpts over the treasury curve.” Although AMCV management has indicated that it is premature to speculate on the impact the ship will have on forward earnings, the Lazard Freres report presents a “rough estimate” of the financial earning power of the ship. The analysis suggests the addition of the ship should generate in excess of $30 million EBITDA on a yearly basis. “The earnings pick-up from the Nieuw Amsterdam is impressive, with over $.50/share ($10 million) dropping to the bottom line,” the report said. The report concluded that it is the opinion of analysts that AMCVs lock on the Hawaiian cruise market, along with the ability to leverage the business at low, government guaranteed financing rates, and significant support of large AMCV shareholders, present a unique opportunity for growth. “the new ship should provide a preview of consumer appetite for cruises in Hawaii aboard modern vessels, ahead of the scheduled deliveries of the two newbuildings from Ingalls Shipyard in January 2003 and January 2004. Successful execution of the coastal cruise business and continuous solid performance at the company’s core Delta Queen and American Hawaii operations should also positively affect AMCV shares over the coming year,” the report said.
Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Halliburton to Settle US Gulf Spill Claims for $1.1b

Halliburton Co said it reached a $1.1 billion settlement for a majority of claims against the company for its role in the BP oil spill in the Gulf of Mexico in 2010.

RDS Wins Engineering and Design Contract for Sea Lion

Rig design and engineering specialist RDS has been awarded a front-end engineering design (FEED) contract by AMEC for Premier Oil’s Sea Lion development in the North Falklands Basin.

Joe Barton: Lift Oil Export Ban

A senior U.S. Congressman from Texas has come out in full support of the United States lifting the 40-year old ban on crude oil exports, putting him at odds with

Cruise Ship Trends

Keel Laid for Holland America Line’s New Ship

Holland America Line celebrated the keel laying of its new 2,650-guest Pinnacle Class ship on August 22 at Fincantieri’s Marghera shipyard in Italy. A 680-ton block

Kiel Port Growth Continues

Cargo and passenger handling rise by 3%. Handling in the Port of Kiel continued to grow in the first half of the year. A total of 3.24 million tons of cargo

Warming Aids Arctic Economies, but Short of 'Cold Rush'

Climate change is aiding shipping, fisheries and tourism in the Arctic but the economic gains fall short of a "cold rush" for an icy region where temperatures are

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1127 sec (9 req/sec)