Cruise operator Genting Hong Kong sinks deeper into the red, with first half loss of US$202m

The cruise liner Genting Dream.
The cruise liner Genting Dream.PHOTO: GENTING HONG KONG

SINGAPORE- Cruise operator Genting Hong Kong sank deeper into the red with a net loss of US$202.2 million for the six months ended June 30, from a loss of US$53.6 million for the same period a year ago.

Total revenue for the period was US$532.5 million, up 22 per cent from US$435.8 million, due to a jump in revenue from cruise and cruise-related activities. Revenue from cruise and cruise-related activities rose 22.7 per cent to US$471.2 million in the first half of the year, according to its first half earnings released late Thursday.

Passenger ticket revenue and onboard revenue rose significantly due to the full six months' operation of cruise ships Genting Dream and Crystal Mozart, which were launched in late October 2016 and July 2016 respectively.

But additional depreciation of Genting Dream and Crystal Mozart, higher marketing costs and startup costs of new Crystal river ships resulted in segmental loss of its "cruise and cruise-related activities", Mr Lim Kok Thay, chairman and chief executive of Genting Hong Kong said.

Loss per share widened to 2.38 US cents, from 0.63 US cent a year ago. The company will issue an interim dividend of one US cent, payable on Sept 29.

Total operating expenses, excluding depreciation and amortisation, increased 38.5 per cent to US$477.5 million mainly due to the full six months' operation of cruise ships Genting Dream and Crystal Mozart, startup costs of new Crystal river ships and AirCruises operations, and full six months' startup and newbuild activities of shipyards in Germany to gear up for the Global Class and Endeavor Class ships in 2017, as compared with its two months' post-acquisition activities in the first half of last year.

Total depreciation and amortisation widened to US$86.1 million, primarily due to the additional full six-month depreciation of Genting Dream and Crystal Mozart and shipyards in Germany acquired in April 2016.

The group's net debt position was US$418.5 million as at June 30, compared with net debt of US$131.9 million as at December 31, 2016.

To focus growth in the cruise business, Genting Group formed Genting Cruise Lines, a new division of Genting Hong Kong comprising its three cruise brands, Star Cruises, Dream Cruises and Crystal Cruises. The core Asian cruise segment is doing well with sequential quarterly growth in occupancy and yields this year, Mr Lim said.

To strengthen the Dream brand, Genting Dream is making Singapore its new homeport, operating two-night weekend cruises and five-night weekday cruises that will alternate between five-night weekday cruises to Bali and Surabaya in Indonesia and five-night weekday cruises to Kuala Lumpur, Penang and Phuket.

With the arrival of a Dream ship in Singapore, SuperStar Gemini will be repositioned from Singapore to Bangkok, offering a two-night cruise to Koh Kong in Cambodia, a two-night cruise to Koh Kong and Koh Kut in Thailand and a three-night cruise to Sihanoukville in Cambodia and Koh Samui in Thailand.