Cruise parent posts $35M loss

Hawaii service both helps and hinders the bottom line at NCL

Norwegian Cruise Line's parent, the operator of three U.S.-flagged ships in Hawaii, lost $35.1 million in the second quarter but saw revenue jump 33.5 percent from a year ago, helped by increased capacity in the islands.

Miami-based NCL Corp. said yesterday that increased fuel and interest costs and foreign exchange translation losses significantly contributed to the quarterly loss after the company posted a $602,000 gain in the year-earlier period.

Colin Veitch, president and chief executive of NCL, said continued higher operating costs in the company's Hawaii operations, softer pricing in the Caribbean, higher fuel prices and increased interest costs will continue to put pressure on NCL's results during the second half of this year. In Hawaii, NCL operates the Pride of Aloha, the Pride of America and the Pride of Hawaii.

"Though it is never pleasing to report a net loss, nevertheless we are pleased with our revenue performance and our cost control efforts," said Colin Veitch, president and chief executive of NCL. "We are clearly operating in a very challenging environment, and despite the effects of softer pricing, significantly higher fuel costs and substantial startup costs associated with our NCL America operations, we continue to show improvement in operating income per capacity day, particularly so in the non-U.S. side of our operations that represents the great majority of our business."

NCL said fuel costs jumped 55.5 percent in the quarter, averaging $365 per metric ton from $275 per metric ton a year earlier. Higher interest rates nearly doubled the cost of interest expense to $33.9 million from $17 million a year ago while the weakening of the U.S. dollar versus the euro left the company with a noncash foreign exchange translation loss of $22.3 million for the quarter compared with a foreign exchange translation gain of $15.3 million a year earlier.

The company said its gain in revenue primarily was attributable to a 19.5 percent increase in capacity and a 9.2 percent gain in net yields that resulted from higher passenger ticket prices and an increase in onboard spending.

Operating income per capita day jumped to $9.89 from 53 cents.