Net loss grows at cruise line

PUBLISHED : Friday, 23 February, 2007, 12:00am
UPDATED : Friday, 23 February, 2007, 12:00am

Star Cruises, the world's third-largest cruise operator, said fourth-quarter net loss widened by almost six times because of an impairment loss and higher interest payment.

Net loss was US$147.6 million for the quarter to December from US$25.7 million a year ago despite a 6.1 per cent increase in turnover to US$547 million.

Operating loss was US$72.5 million compared with a profit of US$12.6 million a year earlier.

Star Cruises, which runs cruise lines under brands such as NCL and SuperStar, booked an impairment of US$30.6 million arising from 'a ship and the Orient Lines trade name', it said without elaborating. Orient is under its NCL Group.

'NCL Group has seen a strong response to its new marketing campaign and an improvement in the pace of bookings during the fourth quarter ... and has been selectively increasing prices on certain sailings and itineraries,' the company said.

But because of abundant supply in the Hawaii routes and weaker demand in the Caribbean, NCL was expected to generate a negative yield in the first half, it added.

The NCL operation was also the main cause of the 5.5 per cent increase in the company's ship operating expense during the quarter.

Finance costs jumped 30.4 per cent to US$62.6 million on higher interest rates and debt. It also booked an exchange loss of US$13.8 million arising from its non-cash foreign currency debt.

Average fuel prices, however, fell 0.7 per cent, accounting for 17.3 per cent of expenses, down from 19.4 per cent a year ago.

For the full year, Star Cruise reported net loss of US$156.2 million, compared with a US$17.9 million profit a year ago.