Ubs Warburg News

Much as has transpired in mainstream consumer markets, the dot com craze has recently enveloped the maritime world with promises of cost savings and operational efficiencies. While an attrition and natural process of consolidation can eventually be expected, the world of e-commerce solutions for the maritime market is definitely in its infancy. While it is impossible to judge the full working models in this report, the following text contains synopsis reports on some of the more noteworthy market entrants. Recently launched by Boston-based WebPark Corp., Boat-Park.com is an on-line virtual trade show, which seeks to bring together worldwide participants into its virtual trade show, which is open 24/7.

The big cruise lines have been steadily filling their rapidly expanding fleets with passengers looking to escape an especially harsh North American winter, but as they get ready to release quarterly results, Wall Street is worried that ticket prices may not be high enough. Analysts are expecting profit declines for the winter quarter from the top three cruise lines, starting with industry leader Carnival Corp., which plans to release its fiscal first-quarter results on Wednesday (March 21, 2001). Cruise stocks, including those of Royal Caribbean, the world's No. 2 operator, and Britain's P&O Princess Cruises, which ranks third, have in recent weeks given up much of their bounce back gains after a sustained decline last year.

Australia's largest marine towage group Adsteam Marine Ltd. has agreed to buy Howard Smith Ltd's Australian and U.K. towage businesses for A$500 million. "The transaction is in line with Adsteam Marine's previously stated objective of using strategic international acquisitions to grow its harbor services operations into a global business," David Ryan, Adsteam's managing director said. The purchase would double Adsteam's earnings before interest, tax, depreciation and amortization (EBITDA) and enhance its earnings per share before goodwill in the first full year of operations. Howard Smith said around A$250 million of the sale proceeds would be used to fund share buybacks both on- and off-market, and the balance would repay debt and fund potential acquisitions.

UBS Warburg on Tuesday cut its earnings estimates for the cruise operators it covers, including Royal Caribbean and Carnival Corp. A UBS analyst cut the full-year 2001 earnings estimate for Royal Caribbean to $1.87 from $2.21, and lowered the 2002 estimate to $2 from $2.36. Farley assigned Royal Caribbean shares a 12-month price target of $23, down from $27. The analyst lowered estimates on Carnival Corp. to $1.74 from $1.78 for 2001 and $1.96 from $2.00 for 2002. "We believe that the stock's recent weakness already reflects concerns about the economy and particularly given that we expect the stock will take a hit in Tuesday's trading, the risk/return at these levels still makes the stock attractive, in our view.

Shares in Britain's largest package tour operator Airtours Plc fell by as much as eight percent on Monday after Carnival Corp said it would sell its 25 percent stake in the company. The stake was worth around 358 million pounds ($514.8 million) at Friday's closing price of 292 pence. Carnival said the strategic reasons for its minority stake in Airtours were "no longer compelling". Airtours said it had agreed to release Carnival from the share lock-up agreement between them. "On the basis that they wanted to pursue their strategy in cruising, we were happy to release them," group chief executive Tim Byrne said. Up to 123.3 million shares will be placed with international institutional investors, with the book expected to close on Thursday.

Carnival Corp said on Tuesday its growing cash holdings were spurring market speculation that the world's largest cruise group was on the acquisitions trail. A spokesman for the Miami-based operator of 45 cruise ships, declined to speak directly to reports that Carnival may be working on a bid for Hapag-Lloyd cruises. "It is our policy not to comment on market rumors," he said. Hapag-Lloyd, a unit of the world's largest travel group Preussag AG, operates five ships in German-speaking countries. A spokesman for Hapag-Lloyd said on Monday he knew of no bid for the company. With pricing pressure in its core North American markets, Carnival has been looking to Europe for growth.

Torch Offshore Inc., an undersea construction firm, priced its initial public offering at $16, the top end of its expected price range, underwriter UBS Warburg said on Thursday. The company offered 5 million shares and raised $80 million through the deal. Torch, which will trade under the symbol "TORC" on the Nasdaq, had expected the deal to price between $14 to $16 per share. The offering comes amid a spate of energy company IPOs, such as Global Power Equipment Group Inc. and Encore Acquisition Co. aiming to whet investor appetite for investments that gain with a perceived shortage of energy. Gretna, La.-based Torch, which serves undersea drilling operations of oil and gas companies in the Gulf of Mexico…

Peninsular & Oriental Steam Navigation Company Plc (P&O) said its ports business remained robust during the second quarter despite slower growth in world trade. But analysts said P&O's trading update confirmed its ports division's 10 percent internal growth for the quarter on a year ago was still below the company's target annual rate of 16 percent growth for the 12 months to December 31, 2001. P&O's ferries business found conditions tough in the quarter, raising the prospect that some analysts might trim full-year earnings forecasts on the back of less-than-expected ports growth and deteriorating ferries and container markets. "The ports business is showing some robust growth as they would say…