Genting HK sinks deeper into the red in first half

To grow the cruise business, Genting Group formed Genting Cruise Lines, which is a division of Genting Hong Kong that encompasses Star Cruises, Dream Cruises and Crystal Cruises. The core Asian cruise segment is said to be doing well, with sequential
To grow the cruise business, Genting Group formed Genting Cruise Lines, which is a division of Genting Hong Kong that encompasses Star Cruises, Dream Cruises and Crystal Cruises. The core Asian cruise segment is said to be doing well, with sequential quarterly growth in occupancy and yields this year.PHOTO: GENTING HONG KONG

Higher depreciation, marketing and start-up costs the key reasons, says cruise operator

Cruise operator Genting Hong Kong sank deeper into the red in the first half, due to higher depreciation, marketing and start-up costs.

The firm recorded a net loss of US$202.2 million (S$275.8 million) for the six months to June 30, from a loss of US$53.6 million for the same period a year ago.

Revenue came in at US$532.5 million, up 22 per cent, thanks to a 22.7 per cent jump in turnover from cruise and related activities.

Revenue from passenger ticket sales and onboard spending rose significantly, due to the full six months' operation of cruise liners Genting Dream and Crystal Mozart launched last year. But additional depreciation costs of the two liners and higher marketing and start-up expenses of the Crystal river ships took their toll, said chairman and chief executive Lim Kok Thay. Loss per share widened to 2.38 US cents, from 0.63 US cent a year earlier.

The company will pay an interim dividend of one US cent per share, payable on Sept 29.

Total operating expenses, excluding depreciation and amortisation, increased 38.5 per cent to US$477.5 million. This was due in part to the full six months' operation of Genting Dream and Crystal Mozart, start-up costs of new ships and a full six months of shipyards in Germany gearing up for the Global Class and Endeavor Class vessels.

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 2016.

  • AT A GLANCE

  • NET LOSS: US$202.2 million (-277%)

    REVENUE: US$532.5 million (+22%)

    INTERIM DIVIDEND: 1 US cent a share

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 Dec 31, 2016.

To grow the cruise business, Genting Group formed Genting Cruise Lines, which is a division of Genting Hong Kong that encompasses 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.

Genting Dream is making Singapore its new home port and operating two-night weekend cruises and five-night weekday trips that will alternate between Bali and Surabaya in Indonesia and Kuala Lumpur, Penang and Phuket.

A version of this article appeared in the print edition of The Straits Times on August 19, 2017, with the headline 'Genting HK sinks deeper into the red in first half'. Print Edition | Subscribe