$72.5m net loss weighs down Genting Hong Kong

Genting Hong Kong sank into the red in the first half year even though the acquisition of Crystal Cruises last year propelled the cruise ship operator's revenue by 58.4 per cent to US$435.8 million (S$589.56 million).

First-half earnings were dragged down, owing to one-time start-up and marketing costs for the launch of its new Dream and Crystal cruise brands and products this year.

The bottom line was also hit by higher overall operating as well as selling, general and administrative expenses, including depreciation and amortisation.

  • AT A GLANCE

  • NET LOSS: US$53.6 million (N.A.)

    REVENUE: US$435.8 million (+58.4%)

The firm on Tuesday night posted a net loss of US$53.6 million for the six months to June 30, reversing from a net profit of US$2.17 billion in the same period a year ago.

Total operating expenses, excluding depreciation and amortisation, rose 73.1 per cent to US$344.7 million, while selling, general and administrative expenses, excluding depreciation and amortisation, surged 157.6 per cent to US$119.3 million.

Losses per share stood at 0.63 US cent for the half year, compared to earnings per share of 26.77 US cents previously. There was no interim dividend for the period, as with the year before.

Genting Hong Kong said in its earnings report that it continues to develop its three-brand cruise portfolio - Crystal Cruises for the ultra-luxury market, Dream Cruises for the premium segment, an upscale brand specifically conceived and built for Asia, and Star Cruises for the contemporary market.

The group bought Crystal Cruises for USS$550 million last year, which operates sister ships Crystal Serenity and Crystal Symphony.

The Crystal Serenity, which set off from Seward, Alaska last week with nearly 1,000 passengers, is scheduled to dock in New York on Sept 17. The voyage marks the first time a passenger ship this size is sailing the North-west Passage, where warmer temperatures and melting ice are opening the Arctic for business.

Passengers on board the US$350 million vessel paid US$22,000 to US$120,000 for the journey, which took three years of planning and preparation to avoid any mishaps, according to an Agence France-Presse report.

Genting Hong Kong said that its three shipyards in Germany, recently renamed as MV Werften, will focus on the group's new shipbuilding programme, which includes building luxury Crystal River ships next year, the first of a series of Crystal Endeavour Class polar expedition yachts due in 2018, and the first of a series of Star Cruises Global Class cruise ships by 2020. "The group's goal is to transform MV Werften to become the world's leading and most efficient cruise shipbuilder by making key investments and modernisations," it said.

Genting Hong Kong shares closed flat at 27.5 US cents yesterday.

A version of this article appeared in the print edition of The Straits Times on August 25, 2016, with the headline '$72.5m net loss weighs down Genting Hong Kong'. Print Edition | Subscribe