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 Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


Sandra Weakens to Tropical Storm off Mexico's Coast

Hurricane Sandra weakened to a tropical storm on Friday and was expected to continue losing strength as it approached Mexico's Pacific coast, the U.S. National Hurricane Center (NHC) said.

Extended Warranty from Yanmar for Sailboat Engines

Yanmar Marine International B.V. has introduced an extended 3 years’ period of YANMAR Limited Warranty for Sailboat Engine Models. This extended warranty of

Fugro's Havila Harmony to join MH370 Search

Fugro is providing an additional vessel, the Havila Harmony, to join the search for the missing flight MH370 in the southern Indian Ocean. From the 93-metre multi-role vessel,

Cruise Ship Trends

Norwegian Escape with Biggest Scrubbers sets Sail

On a sunny October day in the German harbor-town of Hamburg, M/V Norwegian Escape, a brand new cruise ship, sets sail for the first time. On board are five Yara SOx scrubbers – one for each engine.

First Cruise Ships Dock at Abu Dhabi’s New Stopover

Abu Dhabi Ports─the master developer, operator and manager of ports and industrial zones in the Emirate―has started welcoming cruise liners at Sir Bani Yas Island,

Five P&O Cruise Ships Meet in Sydney

Sydney is the stage for the biggest get-together of a fleet of cruise ships ever seen in the harbor city.    Five P&O cruise ships have created a V-formation

Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Pipelines Pod Propulsion Salvage Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | 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: 0.1022 sec (10 req/sec)