The Meyer Turku shipyard and Royal Caribbean Cruises have signed a contract for the fourth Icon-class cruise ship. The deal also includes options to build a fifth and a sixth Icon-class ship.
The fourth vessel will be delivered in 2027. Meyer Turku is currently building the second and third Icon cruise ships, the largest class of cruise ships constructed.
These will be delivered to Royal Caribbean in 2025 and 2026. The employment impact of the now-confirmed order is calculated to be 13,000 person-years.
"This is great news for Finland," Prime Minister Petteri Orpo (NCP) commented in a press release from the shipbuilder.
Last year, the shipyard completed the construction of the world's largest cruise liner.
Work begins immediately
According to Anna Hakala, the shipyard's spokesperson, the new order will bring peace of mind to the workers at Turku Shipyard.
"For the employees, this means that the outlook for the future is longer and Turku Shipyard can focus on work and business development."
Hakala was tight-lipped regarding whether the planning of the fourth Icon vessel was already underway.
"Of course, ships of this type are often designed well in advance before the actual construction starts," she remarked.
Hakala also refrained from speculating on how long the new order would secure jobs at the Turku shipyard if the optional ships are also built.
"It’s impossible to assess at this stage, as the optional ships are still just that — options. However, I consider their construction likely, as they have been publicly announced," she added.
Long-awaited profits
The most recent ships built in Turku have been sold at a loss. These mega-ships have been in the red because their construction contracts were negotiated years ago, during which time costs have risen significantly.
Although Meyer Turku has managed to negotiate some increases in the contracts, these have only partially offset the rising costs. In 2023, the company reported losses of 106 million euros, following a loss of 19 million euros in 2022.
During 2023, the company's cash reserves dwindled from 170 million euros to 41 million euros. On the other hand, the company has receivables amounting to tens of millions of euros.
The contract signed now includes standard terms regarding ship financing. This means that the buyer will pay the bulk of the purchase price upon delivery of the ship.
Meyer Turku has previously estimated that the next cruise ship built will be profitable again, with better knowledge of both the sale price and construction costs. In last year's financial statements, the company projected a return to profitability in 2024.
"In ship classes, profitability typically improves as each ship gets built, as the construction and implementation can be optimised," Hakala explained.
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