NCL loss lessened by lower isle costs
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NCL Corp. Ltd., parent company of Hawaii-based NCL America, said yesterday it pared its losses in the second quarter, in part because of reduced expenses in Hawaii.
The company lost $24.6 million in the quarter, an improvement upon the $35.1 million loss in the same period last year. Revenue increased to $553.1 million from $502.8 million the year before.
"As we look out to 2008 we have positive indications that the measures we have implemented thus far are beginning to work," said Colin Veitch, president and chief executive officer.
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NCL Corp. Ltd., the parent company of Honolulu-based NCL America, said yesterday it experienced losses again in the second quarter, but appears to have stemmed some of its earlier financial bleeding.
The Miami-based cruise company reported yesterday that it lost $24.6 million on revenue of $553.1 million. For the same period the year before, NCL said it lost $35.1 million on revenue of $502.8 million.
For the year, NCL said it lost $85.3 million on revenue of $1.04 billion. The year before, the company said it lost $63.9 million on revenue of $929 million.
Earlier this year, the company blamed NCL America for a threefold widening of losses in the fourth quarter and announced that it would send Pride of Hawaii, its newest home-ported ship, Europe in February of 2008.
Increased competition from foreign-flagged cruise ships that have chosen to add more Hawaii stops to their itineraries as well as increased cabin inventory from the addition of a third Hawaii ship in April of 2006 had softened pricing for NCL America.
But the company reported last week that forward bookings have improved as a result of their decision to downsize the Hawaii market. Also, new legislation has allowed NCL America to fill some jobs with foreign crew. which is expected to improve labor costs, employee retention and product delivery.
"Our second-quarter results reflect the challenges we continue to face in Hawaii," said Colin Veitch, president and chief executive officer of NCL Corp. "However, as we look out to 2008 we have positive indications that the measures we have implemented thus far are beginning to work."
The company said lower costs in its Hawaii operations helped reduce overall expenses in the second quarter.
While NCL has said that NCL America is firmly anchored in Hawaii, speculators have questioned the fate of the U.S.-flagged operation. An investment announced last week by a private equity group, Apollo Management LP, has bought struggling NCL America some time to return to profitability.
The arrangement will give NCL America up to $50 million to cover cash losses and give the company time to turn its performance around.
