Hawaii costs drag on Norwegian
Norwegian Cruise Line's parent narrowed its fourth-quarter loss from a year ago but said operating expenses were higher due to its expansion in Hawaii.
NCL Corp. said yesterday it had a net loss of $28.8 million compared with $37.7 million a year earlier. Revenue, though, increased 22.7 percent to $398.3 million from $324.5 million.
"We continue to be pleased with the improvement in our operating income per capacity day," said Colin Veitch, president and chief executive officer of NCL. "This metric continues to show improvement despite the effect of higher fuel costs and significant startup costs associated with the expansion of our Hawaii trade."
Capacity days represent double occupancy per cabin multiplied by cruise days for the period.
NCL, based in Miami, operates two U.S.-flagged ships -- the Pride of Aloha and the Pride of America -- for interisland cruises in Hawaii. Another vessel, the Pride of Hawaii, is scheduled to be delivered in April.
The cruise line operator said its net cruise costs per capacity day during the quarter rose 6.1 percent from a year earlier, with higher payroll and related expenses primarily attributable to the U.S. crew used in the interisland cruises. The Pride of Aloha began sailing in June 2004 and the Pride of America started at the end of the second quarter of 2005.
Average fuel costs during the quarter increased 50 percent to $327 per metric ton from $218 per metric ton. NCL said it began managing its fuel costs last quarter through a fuel-swap agreement, and as of Dec. 31 had hedged 25 percent of its estimated fuel consumption for the first quarter of this year and 5 percent for the second quarter.
Operating expenses in the quarter rose 21.3 percent to $409.3 million from $337.5 million.
For the year, NCL's earnings swung to a net gain of $19.2 million from a net loss of $8.7 million in 2004. Revenue for the year increased 20.8 percent to $1.6 billion from $1.3 billion.