Ambassadors outlines Windstar expectations

**Ally** · 02-28-2007, 02:55 PM

Windstar Cruises is expected to contribute $61m in revenue to Ambassadors International during the last eight months of 2007, resulting in pre-tax income of $4.5m and net income of $4.2m or 36 cents per share.

The estimates were given by Ambassadors management during today’s earnings call. The company is in the process of acquiring Windstar in a $100m transaction expected to close in April.

Windstar has improved its performance in recent years, turning a $2.9m profit in 2006 after a net loss of $550,000 the year before, Ambassadors management said. The sail-cruise fleet is 90% booked for 2007.

Joe Ueberroth, chairman, president and ceo of Ambassadors, said Windstar can command higher pricing. The daily ticket revenue is slightly lower than that of Majestic America Line, and Ambassadors believes its cruise pricing is $100 to $300 a day below other small-ship competitors.

Asked why Windstar assets have been underperforming in the Carnival Corp. portfolio, Ueberroth referred to published remarks by Holland America chief executive Stein Kruse, who indicated that his line had grown so large it needed to concentrate on its core business post-9/11.

Ueberroth said Windstar and Majestic America will operate as separate brands, both in the luxury sector. The Majestic America vessels are undergoing upgrades. Wind Spirit is set for an extensive drydock refurbishment this spring, followed by Wind Star in the fall. Each $5m job will be carried out in Lisbon. Wind Surf underwent an $11.8m upgrade last year.