NCL’s net loss grows in fourth quarter
Norwegian Cruise Line's parent, in the process of reducing its Hawaii fleet from three ships to one in an attempt to stem the flow of red ink, said yesterday its net loss widened in the fourth quarter and nearly doubled for the year.
Miami-based NCL Corp. said its net loss for the quarter was $133 million versus a loss of $116 million a year ago as the company continued to be affected by the weakening of the U.S. dollar and higher interest expenses.
Interest expense during the quarter rose 30 percent, or $11.7 million, due to an increase in the company's average debt borrowings, while the strength in the euro against the U.S. dollar led to foreign exchange translation losses of $30 million, up from $14 million in the year-earlier quarter.
Revenue, though, rose 10.7 percent to $497.5 million from $449.5 million on a 4 percent increase in capacity days and an 11 percent increase in net yields due to higher ticket prices, higher onboard spending and increase in occupancy levels.
For the year, NCL posted a net loss of $227 million compared with a net loss of $130.9 million in 2006. Revenue rose 9.9 percent to $2.2 billion from $2 billion.
NCL, 50 percent owned by Hong Kong-based Star Cruises Ltd., said it was hurt during the year by foreign currency conversion losses of $94.5 million versus conversion losses of $38.9 million in 2006.
NCL has been trying to turn around its Hawaii operation with a $1 billion cash infusion from private-equity group Apollo Management LP and a reduction in Hawaii capacity by pulling Pride of Hawaii and Pride of Aloha out of its fleet. Pride of Hawaii already has been reflagged and is making its way to Europe, while Pride of Aloha is scheduled to leave the islands on May 11 for Asia, leaving Pride of America as the only remaining NCL vessel based in Hawaii.
Colin Veitch, president and chief executive of NCL, said he's optimistic about this year.
"With the addition of our new shareholders, the implementation of Freestyle 2.0 and Partnership 2.0 (cruise ships) and a successful refinement of our strategy in Hawaii, we look forward to a promising year in 2008," Veitch said.
Veitch also said he expects NCL America to benefit financially from the steps the company has taken.
"The further reduction in capacity, coupled with the stabilization of our staffing, is expected to enable us to make this unique offering within the second half of the year."