Is it just me or is Carnival going to have to come up with an original ship design sometime soon, they seem to use the same design for all of their brands – from Cunard to Costa. I’m sure it increase shareholder value, which is what the company is all about, but I think they will never win any awards for their “ruler and hatchet” designs.
Costa places $1bn cruiseship order John McLaughlin, 19 October 2007 Lloyds List COSTA Crociere has placed orders for two more 114,200-ton cruiseships with Italian state-owned shipbuilder Fincantieri. The Carnival-owned cruise line will pay €510m ($729m) per ship for a total cost in excess of €1bn.
The vessels, sister ships of the Costa Concordia and the recently launched Costa Serena, will be built at Fincantieri’s Marghera yard in Venice, and are due for delivery in 2011-2012. A fifth sister for the two vessels, the Costa Pacifica, is currently under construction at Sestri Ponente.
The latest move takes Costa Crociere’s complement of orders at Fincantieri to five, and will boost its fleet to 17 ships upon delivery. They will also add 20% to Costa’s fleet capacity based on double occupancy, taking it 36,700 guests. The new ships will have capacity for 3,780 passengers if all upper berths are included, or 3,012 based on double occupancy. They will also have 17 more balcony cabins than their older sisters, and 1,506 cabins in all.
Costa chief executive Pier Luigi Foschi described the orders as a response to increasing international demand and to the company’s desire to reinforce its market leadership in Europe. For Fincantieri, the orders reaffirm the strength of its relationship with Carnival, for which it is all but the house builder. These new ships aside, the company already had 13 Carnival ships on order for almost 1.5m tons and passenger capacity of 35,300.
The orders also come at a useful time, with Fincantieri gearing up for an anticipated initial public offering early next year. There remains some disgruntlement both in the unions and within the ruling centre-left coalition over the proposed sale of a minority share of the company.
These new orders may buttress their argument that all is relatively well at Fincantieri, and that it has the resources to invest for the future without needing to turn to the stock market. Raising funds to modernise existing yards and push through a diversification strategy is the prime rationale for the share sale. At the same time, the IPO still looks more likely than not and a bulging order book will do Fincantieri no harm in the coming debate on the initial share price. “This agreement means that, over the course of the last year, we have gained in the cruise sector alone orders for 12 ships, of which two options, for a total value of over €5bn,” said chief executive Giuseppe Bono.
Fincantieri’s total orderbook now runs to 18 ships. Carnival orders aside, it has also picked up orders this year for two vessels from Oceania and one from Silversea. Meanwhile, Fincantieri has struck an agreement with the banking concern Gruppo Unicredit to help ease the pressure of rising costs on its suppliers. Under the arrangement Unicredit, through its subsidiaries MCC and Banca di Roma, will provide “preferential access to credit at competitive costs through specific bank products and factoring”. The Trieste-based builder, which is substantially debt free and consequently has an excellent credit rating, has a network of more than 6,000 such companies representing around €1.5bn a year in billings.
The move comes at a time when Fincantieri is looking to hold down costs in the face of surging raw materials and energy prices. Helping its suppliers and subcontractors to do the same at a time of tightening credit is one battle in that wider struggle.