MHI Turning Back on Cruise Ships?

After experiencing cost overruns in its cruise ship sector, Japanese shipbuilder Mitsubishi Heavy Industries (MHI) is now reviewing its future position in the cruise shipbuilding industry, The Financial Times said.

MHI has been discussing its future involvement in cruise shipping with its customers, the Financial Times cited Shunichi Miyanaga, MHI’s chief executive.

Miyanaga added that the company expected an increase in demand for cruise ships from Chinese companies once the country’s economy improves.

Namely, MHI 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, ordered from the shipbuilder in November 2011.

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

The first cruise ship from the order was delivered in March this year, a year past its initial delivery date. The second vessel, which had been due to be delivered early this year, is now expected to be delivered in 2017.

MHI saw a drop of 42.2 percent in its net profit for the fiscal year ended March 31, 2016, despite an increase in received orders and operating income.

Namely, the company ended FY 2015 with a net profit of JPY 63.8 billion (USD 591.1 million), against JPY 110.4 seen in the previous fiscal year.

World Maritime News Staff

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