Operating losses from its North American business put Star Cruises back into the red in the fourth quarter last year as the spectre of war in Iraq loomed larger. The world's No 4 cruise-ship operator booked a US$27.67 million loss in the fourth quarter to December 31, following a profit of US$78.6 million in the first three quarters. The fourth-quarter loss set last year's net profit back to US$50.93 million, which compared with a loss of US$16.04 million in 2001. The company returned to profit by cutting costs and carrying more passengers in the first nine months last year. Annual turnover rose 13.89 per cent to US$1.57 billion. The fourth-quarter loss of US$11.55 million on North American operations contrasted with the previous quarter's US$48.32 million profit. About 70 per cent of the firm's revenue comes from North America and the rest from Asia. Fourth-quarter Asia-Pacific operations had a US$16.64 million profit, down from US$26.78 million in the third quarter. Higher fuel prices caused by the continuing threat of a United States war on Iraq continued to dent earnings in the fourth quarter. Last year saw fuel prices rise 52 per cent. DBS Vickers had revised down the company's net profit by 15 per cent to US$93.9 million, based on rising fuel costs. Star Cruises, 34 per cent owned by Malaysia-listed Resorts World, last year boosted its capacity 15 per cent and made inroads into the mainland market. The company operates 19 cruise ships, which make port calls in the Asia-Pacific, North and South America, the Caribbean, Alaska, Europe, the Mediterranean, Bermuda and the Antarctic. In Asia, Star Cruises has more than 70 per cent of the cruise market. Earnings per share last year were 1.15 US cents, compared with a loss per share of 0.37 US cents in 2001. The shares were unchanged at HK$2.22 yesterday. The company listed on the Hong Kong exchange on November 30, 2000, and saw its stock peak at HK$8.12 on its second day.