Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
This is a ship which is currently being built at the same dockyard, note it is slightly smaller and will cost $625m.
https://www.cruisemapper.com/ships/Asuka-3-2247
'They're coming fast and furious. We believe there's going to be a scarcity of capacity worldwide. Some of these will go to China,' he said, 'but some of these will continue in the US operation.'
https://www.seatrade-cruise.com/shipbuilding-refurb-equipment/10-more-viking-ocean-ships-2030-tad-bigger-and-some-china
The main thing holding this back is the collossal debt. Have a look at the results presentation where they talk about how they plan to settle the £250m 2026 bond and the language they use.
Their ships have a market value of atleast £700m and the market for buildouts for such vessells are fully booked until 2028 and demand is off the charts since to there are not many dockyards which build such small vessels. These ships cost saga £600m and since 2021 the cost for buildouts has increased by 35%. A sale and leaseback would generate enough cash to be in a net cash position.
I can understand them having relatively high prices, but at the end of the day they are not making outsized profits. A profit of £35m from two ships might even be considered on the low side based on how risky the business is from world events.
I doubt they would in 2023. I wonder what price they will ipo at? Hopefully the saga bod will take notice and make sure we get a fair deal with doing whatever they are planning on doing with regards to the partnership.
Https://www.reuters.com/markets/deals/travel-firm-viking-holdings-seeks-raise-11-bln-us-ipo-2024-04-22/
IPO at 10x EBITDA.
If one of the big operators buys saga they will be able to increase Ebitda by at least 20mn due to operational leverage. Saga's cost base is far too high given their lack of scale. Plus they will be able to add additional ships to the fleet.
The cruise business is still growing, based on current projections on occupancy and per diems the PBT is likely to double in the next 2 years. The current year PBT would have been 5.9m higher if not for what happened in November.
Their travel business is a joke, 1.5m profit on 150m of revenues in a good year. In a bad year like COVID they were be losing 20-40m a year. Someone explain to the BoD the concept of risk adjusted returns. Their cost base is disproportionately high for such a tiny business.
And the appointment of the CEO as a director. He needs to be removed, not fit for purpose.