Hurtigruten Reports 2013; Targets Differentiation from Cruise

Hurtigruten has issued a preliminary report of NOK 26 million in net income (before taxes) on revenues of NOK 3.3 billion for the year ended Dec. 31, 2013, compared to a loss of NOK 351 million on revenues of NOK 3.2 billion for 2012.

The company attributed the improved results to its turn-around efforts, stating that the most important costs were under control and substantially reduced from the year before.

Cost saving measure covered the corporate administration in Norway, the global sales organization and fleet-related initiatives, including fuel savings, crew retention, standardized procurement routines, in addition to boosting onboard revenue.

Hurtigruten’s Norwegian coast product is the largest business segment in the group, representing about 86 percent of its gross revenues for the full year.  Revenues reached NOK 2.8 billion for 2013, but passenger revenue fell 4.7 percent due to a decline in cruise nights. Gross ticket revenue was flat year-over-year.

The load factor was 60 percent for the year and was attributed to weak pre-sales for 2013, which caused the decline in cruise nights compared to the previous year.

Results for the company’s expedition ship, the Fram, improved significantly, generating revenues of NOK 295 million for the year, with 62,950 passenger days and a load factor of 70.5 percent.

The company’s Spitsbergen operations also showed improvement. It comprises year-round accommodations, leasing of snowmobiles, retailing and tours.

According to Hurtigruten, presales for 2014 showed an increase of seven percent in gross revenues by February 10 over last year for its Norwegian coast product and a 14 percent increase for the Fram.

Hurtigruten also cited pressure from international competitors on the Norwegian coast and said a stronger differentiation from the cruise industry will be essential in 2014. A prepared statement said the product is unique, offering an active nature-based experience that nobody else can offer.  Shore excursions, onboard programming and food concepts will be part of the efforts to differentiate the product.

 

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