Genting Hong Kong expects narrower loss in full year on one-off gain

Genting Hong Kong.
Genting Hong Kong. Reuters

Cruise ships operator Genting Hong Kong said it is expected to report a consolidated net loss in the range of US$240 million to US$270 million for the year ended December 31.

The loss was lower as compared to a consolidated net loss of US$537 million last year, it said in a regulatory filing on Wednesday evening.

Genting Hong Kong attributed the expected reduction in losses to several factors, including a one-off gain of US$205 million in respect of the sale of Norwegian Cruise Line Holdings' shares and The Star Entertainment Group's shares and the absence of an impairment on Norwegian Cruise shares of US$305 million in 2016.

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The gains were offset by start-up losses in the Dream Cruises brand for World Dream and the repositioning of Genting Dream to Singapore in November 2017, Crystal Cruises brand extensions in river cruises and the launch of AirCruises.

Dream Cruises, launched slightly more than a year ago, is performing well with improving occupancies and net yields in both the Hong Kong/Guangzhou and Singapore markets, the company said.

However, the arrivals of new and large ships of competitors have caused smaller and older ships to relocate to ports where Star Cruises ships are positioned, creating downward pressures
on occupancies and yields, Genting Hong Kong warned.

The company expects the situation to improve as competitors had announced about 18 percent reduction in capacity by the end of this year.

Shares in the company were unchanged at S$0.23 on the Singapore exchange. Stock has fallen 20 percent in an year.

This article was first published on February 1, 2018