Carnival Corp, the world’s largest cruise company, has returned to German shipbuilder Meyer Werft to order its second cruise ship newbuilding in as many months.
The order, contingent upon financing, will be the fifth Excel-class cruise ship for its namesake Carnival Cruise Line brand, with delivery set for 2028.
This latest order will be built on the same platform as its sisters, with the 180,000-tonne ship powered by LNG and designed to carry over 6,400 guests and 1,800 crew, Carnival said.
“This new order continues to balance our commitment to growth with our responsible capital approach to utilise strong free cash flow over the next several years to strategically improve our balance sheet, significantly reduce our leverage levels and continue to transfer value from debt holders to shareholders,” Carnival chief executive Josh Weinstein said.
In mid-February, Carnival announced the first newbuilding order placed in five years with news that a fourth Excel-class ship would join the Carnival Cruise Line fleet in spring 2027.
The cruise company has said it is focused on adding capacity across the company where it “aligns with demand and our position in the marketplace”.
“This measured capacity growth strategy will result in our adding one to two ships per year beginning in 2027, and we will be identifying additional fleet plans over the coming months for our cruise lines to meet capacity demand and improve execution across all aspects of our operation, with the benefit of yielding higher return on invested capital,” Weinstein said.
US and UK-listed Carnival is expected to report its first-quarter results on Wednesday with a conference call later to discuss the company’s financial performance.
Earlier this month, Goldman Sachs initiated coverage of the Miami-headquartered company with a “buy” recommendation and a target price of $26 per share. The shares currently trade at about $17.
Analyst Lizzie Dove said that jittery investors who believe the bull run for cruise stocks has reached its peak are overlooking a favourable set-up where demand should outpace supply and result in improved prices.
“Investor sentiment is understandably cautious on cruise stocks,” she wrote in a note published on 13 March.
“However, we believe that fundamental, structural shifts have taken place in the industry driving better business models with several incremental pricing tailwinds still to come.”
