The Star Cruises Group has reported a net loss of $8.4 million, or $0.02 per share, on revenues of $1.4 billion for the year ended Dec. 31, 2001, compared to a net loss of $29.6 million, or $0.09 per share, on revenues of $1.3 billion for the year ended Dec. 31, 2000.

According to Star, 01 results were adversely affected by non-recurring expenses of $54.9 million, incluchng $30.8 million related to cutbacks of Star Cruises' North Asian operations with the withdrawal of ships from Taiwan and Japan in face of what it called a steeper-than-expected economic downturn exacerbated by the events of Sept. 11.

Other non-recurring expenses were $15.7 million related to the start-up and promotion of new ships for Norwegian Cruise Line (NCL) and an $8.4 million write-down on one vessel.

Star also said that its North American operations and longer-itinerary ships in Europe were negatively impacted by the events of Sept. 11 resulting in lower occupancies and prices during the last quarter of 2001.

4th Quarter

Star reported a net loss of $57.3 million, or $0.02 per share, on revenues of $339.1 million for its fourth quarter ended Dec. 31, 2001, compared to a net loss of $54.9 million, or $0.02 per share, on revenues of $345.3 million for the fourth quarter ended Dec. 31, 2000.

According to Star, the decrease in revenue year­ over-year was primarily due to a 3.2 percent decrease in net yield (defined as net revenue per passenger day). The decrease in yield was primarily due to the impact of the events of Sept. 11.

Before its fourth quarter, Star had accumulated net income for the nine-month period of $48.9 million, but Star also incurred a loss in last year's fourth quarter, which led to a net loss for the year (2000) as a whole as well.

Star's operating income dropped 37 percent in 2001 compared to 2000, and by 72.3 percent in the fourth quarter of 2001 compared to 2000.

Star reported a decrease in passenger cruise days and capacity days for Star Cruises of 5.2 percent and ep 2.9 percent respectively for 2001 compared to 2000.

Occupancy was down 3.0 percent, but Star said that yield improved 3.6 percent.

The decline in capacity days was primarily due to the sale and drydocking of ships and the cessation of cruise operations in Taiwan and Japan. This was partially offset by the introduction of the Wasa Queen in Sept. 2001 and the Norwegian Star 1 in Nov. 2000.

For the quarter ended Dec. 31, Star said that the decrease in passenger cruise days and capacity days was 12.4 percent and 6.2 percent respectively, compared to the same quarter the previous year. Occupancy was down 6.0 percent, while yield improved by 22.4 percent, according to Star.

NCL

NCL, including Orient Lines, reported a decrease in both passenger cruise days and capacity days of 2.6 percent and 1.2 percent respectively for the year ended Dec. 31, 2001, compared to 2000. (The year-over-year comparison included Norwegian Capricorn Line in 2000.)

Occupancy and yield decreased by 1.0 percent and 8.5 percent. On a net yield basis, the decrease was 10.4 percent.

The 1.2 percent reduction in capacity days was primarily due to the drydocking of ships and the transfer of the Norwegian Star 1 to Star Cruises, which was partially offset by the introduction of the Norwegian Sun in Aug. 2001 and the Norwegian Star in Dec. 2001.

For the fourth quarter, NCL reported a 2.5 percent decrease in passenger cruise days and a 6.6 percent increase in capacity days. Occupancy was 9.0 percent lower, which contributed to a 15.9 percent reduction in yield. On a net yield basis, the decrease was 17.7 percent.

Refinanced Loans

Star also announced that it has refinanced its outstanding $450 million debt related to the 2000 acquisition of NCL. Star said it was in breach of two of the covenants of its previous loan facility as of Dec. 31, 2001, but that it had no material adverse impact on the financial position of the company.

The seven-year refinancing arranged through the Hong Kong Shanghai Banking Corporation includes specific covenants requiring the Lim family to own at least 51 percent of the outstanding share capital and equity interest of the company, and to have direct or indirect management control.

The previous syndicated loan facility was entered into in August of 2000 for a five-year period.

Star was in breach of its previous loan covenants when its net borrowings exceeded its earnings before interest, taxation and d reciation and amortization (EBITDA) by a certain agreed-upon margin.

According to Star, the general slowdown in the global economy combined with the impact of the terrorist attacks on the U.S. led to a greater-than­ expected decline in the Group's net revenues, which was the major contributor to the breach of the borrowings vs. earnings ratio covenant.

In Nov. 2001, Star said it had made all interest and principal payments in accordance with the terms of the loan agreement.

Year-over-year, Star also reported that its interest expense had come down from $172.0 million in 2000 to $105.1 million in 2001.