Norwegian Cruise Line Holdings expects to increase cost savings this year following the $3 billion takeover of Oceania Cruises and Regent Seven Seas Cruises parent Prestige Cruise Holdings.
The company’s original estimate of $25 million in “cost synergies” is expected to rise to at least $40 million this year and to $50 million in 2016.
This is due to come from items such as consolidation of office operations, insurance costs, port fees and shore excursion contracts in addition to “opportunities in onboard revenue”.
The company reported full year adjusted net income of $480.6 million, excluding expenses related to the Prestige acquisition and other items, compared with $295.7 million in 2013.
A 25.5% improvement in adjusted net revenue to $2.4 billion was driven by a 19.8% increase in capacity coupled with a 4.8% improvement in yield.
A fire on board Oceania Cruises’ Insignia in December in the Caribbean resulted in the cancellation of certain voyages. Repairs on the vessel are on schedule for a return to service in March, the company said.
The impact of the incident has been included in the company’s first quarter and full year 2015 guidance, Norwegian said.
The year saw the introduction of Norwegian Getaway (pictured) as the line’s first year-round, Miami-based ship in over a decade. Sister ship Norwegian Escape is due for delivery in October
The purchase of 684-passenger Ocean Princess was announced in November, with a planned delivery to Oceania Cruises in March 2016 under the new name Sirena after a 35-day, $40 million refurbishment. It is sister ship to the line’s Insignia, Regatta and Nautica.
Details of Regent Seven Seas Cruises’ new 750-passenger ship Seven Seas Explorer were revealed last month.
Norwegian Cruise Line Holdings president and chief executive Frank Del Rio said: “Looking back at our accomplishments over the past year, it is clear that 2014 will be remembered as one of solid growth and game-changing expansion for the company.
“Strong results are a testament to the hard work and dedication of our team members who, despite operating in a challenging environment, kept a keen eye on optimising pricing and managing expenses while delivering exceptional vacation experiences to our guests.
“Looking ahead, the acquisition of Prestige has created the cruise industry’s most dynamic and diversified operator, one that is well-positioned to realize meaningful synergies and deliver superior results.
“I look forward to leading this exciting organisation, which mixes a deep history in the industry with an entrepreneurial spirit that is unique among cruise operators.”
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