MHI in Financial Woes Due to AIDA Cruises Ships

Japan’s Mitsubishi Heavy Industries, Ltd. (MHI) has booked additional extraordinary loss of JPY 50.8 billion (USD 457.1 million) in its cruise ship business for the fourth quarter of fiscal year 2015 due to the delay in delivery of German-based cruise line Aida Cruises’ two new cruise ships AIDAprima and AIDAperla.

The additional amount brings MHI’s overall extraordinary losses throughout fiscal year 2015 to JPY 103.911 billion (USD 934.3 million).

The amount is a result of a number of delays for AIDA Cruises’ two large-sized cruise ships, ordered from the shipbuilder in November 2011.

Following difficulties in construction of the prototype ship in fiscal year 2013 and 2014, the shipbuilder encountered design changes in the construction phase due to which the delivery of AIDAprima was delayed. Along with the design changes and the need to address faults found in the final stages, MHI booked an extraordinary loss of JPY 53.061 billion in the third quarter of fiscal year 2015.

In the fourth quarter of fiscal year 2015, the company made finishing touches to the ship before delivery, installed the ship’s control systems and it underwent final inspections, however, the ship is fitted with cutting-edge equipment and resulting work took longer than MHI expected.

“There were more faults in main engines, and in addition to noise reduction measures requested by the customer during sea trials, fires broke out onboard. In the end the ship was not delivered until the middle of March, 2016,” the shipbuilder said.

Featuring a length of 300 meters and a width of over 37 meters, AIDAprima, AIDA Cruises’ first newbuild of a new ship generation, was built to accommodate 3300 guests and over 900 crew members.

MHI added that due to the first ship’s delayed delivery, the construction phase of the second ship has been significantly impacted.

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