The Star Cruises Group has reported net income of $58.6 million, or $1.18 per share, on revenues of $437.5 million for the third quarter ended Sept. 30, 2003, compared to net income of $56.2 million, or $1.25 per share, on revenues of $447.4 million for the third quarter of 2002. Included in the Q3 results of this year were $9.3 million in insurance proceeds from the loss-of-hire coverage net related expenses resulting from the Norway's boiler accident.
Star attributed lower revenues to lower ticket prices and lower occupancy as a result of the lingering impact of SARS on the Asia-Pacific business.
A 1.6 percent capacity increase due to the introduction of the Norwegian Dawn was offset by the non-operation of the Norway.
According to Star, its Norwegian Cruise Line (NCL) brand had a good Q3, reflecting what it called a relatively strong summer season for North American cruising, although occupancy was slightly down at 106.8 percent this year, versus 107.8 percent last year.
Star reported that most domestic trades performed well from a revenue standpoint and that net yield was up 1.6 percent over Q3 last year.
The Norwegian Dawn has completed a successful summer season out of New York, and Star said it is confident the winter deployment will turn out to be strong too, although it expects that the first winter will be a time to prove to the market that the deployment works operationally.
NCL's Hawaii business continues to perform well, and forward bookings for next summer's introduction of the Pride of America were said to be encouraging.
According to NCL, the Caribbean looks challenging next year, while Alaska, Northern Europe, and its New York-to-Bahamas program look strong.
NCL also expects to show yield improvement in 2004, despite a 12 percent increase in capacity, provided the market will not be negatively impacted by unforeseen events as happened this year.
For Q3, Alaska performed well, according to NCL; Hawaii did reasonably well, but not as well as in 2002 - its inaugural season there; Bermuda did satisfactory; Northern Europe performed relatively well; while Mediterranean yields were significantly below last year's.
Also, NCL would not commit to the future of the Norway - whether the ship returns to the U.S. market, goes to Asia, or will be sold.
The Star Cruises brand operated with 2.9 percent higher capacity year-over-year, but occupancy and net yield were 10.8 percent and 12.5 percent lower, respectively. Pricing was used to stimulate demand after SARS when the SuperStar Virgo and SuperStar Leo were relocated back to Singapore and Hong Kong.
On a per capacity day basis, Star Cruises incurred 5.1 percent higher operating costs and SG&A expenses in the first nine months of this year compared to last year, due to higher fuel costs, and costs incurred in response to the SARS outbreak. The latter was comprised of ship relocation costs as well as higher advertising and promotional costs.
Star said that the bookings from the domestic and inbound Asian markets rebounded after SARS, while the inbound Caucasian market from Australia and Europe, which makes up about 10 percent of the total passenger load, has not fully recovered.
Following what Star called a very positive response during its temporary deployment in Australia, the Superstar Leo will be deployed in Australia again during the peak summer months (January through March) in 2004.
Fleetwide, Star reported a load factor of 100 percent and 2,176,090 passenger cruise days for Q3 2003, compared to 104 percent and 2,225,359 passenger cruise days for Q3 2002.
Star reported net income of $27.4 million, or $0.55 per share, on revenues of $1.2 billion for the first nine months of 2003, compared to net income of $92.0 million, or $2.11 per share, on revenues of $1.2 billion for the first nine months of 2002.
The occupancy rate this year was 96 percent with 6,358,900 passenger cruise days, compared to 99 percent and 6,248,438 passenger cruise days last year.