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Carnival Names Operations Head Weinstein As Next CEO Of Cruise Operator

Published on May 11 2022 1:54 PM in General Industry tagged: Royal Caribbean / Norwegian Cruise Line / Carnival / Carnival Corp / Norwegian Cruise / Fincantieri / NCL

Carnival Names Operations Head Weinstein As Next CEO Of Cruise Operator

Carnival Corp CCL.NCCL.L, the world's largest cruise company, has said that Josh Weinstein, its chief operations officer, would become the next chief executive officer, taking over the role from Arnold Donald.

Donald has been CEO of Carnival for nine years and had led the company to post a record profit in 2018 before the COVID-19 pandemic jolted the cruise industry. He will become the vice chair of the company, effective 1 August.

A 20-year veteran of Carnival, Weinstein takes over at a crucial time for the company as it gradually restarts operations after a long pandemic-led hiatus and navigates new issues including a surge in fuel prices due to the Russia-Ukraine crisis.

During his tenure as COO, Weinstein oversaw all of Carnival's major operational functions, including overseeing the company's maritime operations, ports of call and auditing functions.

Earlier this month, Carnival forecast a loss for a third straight year, as it grapples with soaring fuel costs.

The company has said that it expects the full fleets of its nine major cruise line brands to start sailing again by the end of this year.

Fincantieri In Talks With NCL For $4bn Cruise Ship Order - Source

The above news followed news that Italian shipbuilder Fincantieri FCT.MI is in talks with Norwegian Cruise Line NCLH.N (NCL) over an order worth around $4 billion to build new cruise ships, a source with knowledge of the matter has told Reuters.

Italian daily Il Secolo XIX reported that six new ships could be built by Fincantieri for the Miami-based company.

Norwegian Cruise Line declined to comment.

Royal Caribbean Signals Slow Summer Demand In Europe As Ukraine Crisis Weighs

All of the above news was followed by news that Royal Caribbean Group RCL.N has flagged slow summer demand for European cruises due to the Ukraine crisis, after a dull first quarter as it reeled under a resurgence in COVID infections in some parts of the world.

Shares of the cruise operator fell approximately 5% to $73.87 after Royal Caribbean Group said that higher fuel and food costs, spurred by inflationary and supply chain-related challenges, are expected to weigh on 2022 earnings.

The company said while bookings for Europe sailings improved throughout the first quarter, they slowed following Moscow's invasion of Ukraine in late February. Cruises in the Baltic are expected to see the biggest impact.

In March, Royal Caribbean joined rivals Norwegian Cruise Line Holdings Ltd NCLH.N and Carnival Corp CCL.N in canceling sailings to Russia and said it was removing Russian port city St. Petersburg from its upcoming itineraries.

However, global booking volumes in March and April were significantly higher compared to the same period in 2019, with strong demand for North America-based itineraries.

"Recovery is clearly under way...what the shape of that (recovery) curve looks like for the balance of 2022 will depend on the health of the consumer as it relates to inflationary pressures and impacts from the Ukraine war," said M Science analyst Michael Erstad.

The decision by the U.S. Centers for Disease Control and Prevention (CDC) to remove COVID-19 notice against cruise travel in March, almost two years after introducing a warning scale, is expected to boost growth for cruise companies after a long period of minimal business.

Royal Caribbean Group's revenue rose to $1.06 billion in the first quarter from $42.01 million a year earlier, but missed analysts' average estimate of $1.15 billion, according to IBES Refinitiv data.

Excluding items, it posted a loss of $4.57 per share, compared with estimates for a loss of $4.47.

Italy's Fincantieri Reports Sales Rise As CEO Prepares To Leave

All of the above news was followed by news that Italy's Fincantieri FCT.MI said that sales rose 18% from a year earlier in the first quarter to €1.7 billion driven by a strong performance of its core shipbuilding business.

The group is gearing up for the exit of chief executive Giuseppe Bono, who is set to retire after 20 years at the helm to be replaced by former Maire Tecnimont MTCM.MI CEO Pierroberto Folgiero.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were up 17.2% at €118 million.

The EBITDA margin was flat at 7.0% and the company expects it to remain "solid" despite recent rises in commodity prices, general manager Fabio Gallia told an analyst call.

Fincantieri said it had put in place measures to secure materials most critical to its production despite the disruptions caused by the Ukraine war.

It expects to maintain output at full capacity over the year as a whole, with revenues growing faster than anticipated before the global pandemic.

The company is in talks with Norwegian Cruise Line NCLH.N over an order worth approximately $4 billion to build new cruise ships, a source has told Reuters.

Gallia declined to comment on the matter during the analyst call but said that the company expected ship orders in the cruise sector to resume "in 2023, if not in 2022" after the voyages business was harshly hit by the pandemic. The cruise sector accounted for half of Fincantieri's first-quarter revenues.

The management change is expected to be approved at a shareholder meeting later this month.

Italian state lender Cassa Depositi e Prestiti (CDP), which holds a 71% stake in Fincantieri, has also put forward Claudio Graziano as chairman to replace Giampiero Massolo.

"To my successors I wish the best of luck, as I fully understand the responsibilities they are about to embrace", Bono said in a statement.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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