Star Cruises has reported net income of $2.4 million on revenues of $282.6 million for the year ended Dec. 31, 1998, compared to net income of $135.5 million on revenues of $310.8 million for 1997.
The revenue decrease was attributed mainly to the devaluation of regional currencies in Asia.
Total expenses for 1998 also decreased due to the devaluation despite increased cruise capacity. As a result, Star Cruises was able to increase its operating income from $32.9 million in 1997 to $50.0 million in 1998.
However, extraordinary charges reduced net income. A total of $47.6 million was related to the start-up costs for the Superstar Leo, a Joss from discontinued cruise operations in the U.S. (gaming ship in New York), reduced estimated value of non-cruise property at Port Klang, foreign exchange losses, and various other items.
Star Cruises' 1998 operating margin was 17.7 percent which compares favorably with the majo cruise companies. Operating expenses were 57.3 percent of revenues, while sales and administrative expenses were 12.7 percent of revenues.
Star also reported 1.3 million passenger cruise days for 1998 and a load factor of 88 percent, compared to 1.1 million passenger cruise days in 1997 at the same occupancy rate.
Revenue per passenger day was $220.61; operating expenses per passenger day, $126.39; and total costs and expenses per passenger day, $181.59.
Operating income per passenger day was $39.03, compared to $80 for P&O, $63.02 for Carnival Corporation, $42.10 for Royal Caribbean International, and $24.47 for Norwegian Cruise Line.
Star Cruises said that the Taiwan market was expected to contribute to income this year with the positioning of the Star Aquarius in Tapei in November of last year.
The company also said that the positioning of its new SuperStar Europa in Bangkok in October has been well received by European and Australian travel agents.
It is also expected that the replacement of the Superstar Leo with the sistership, the Superstar Virgo, in Singapore in late September of 1999 will create demand and repeat passengers. The Leo meanwhile moves on to Hong Kong.
By the end of 1999, Star Cruises will have ships positioned in Singapore, Hong Kong, Taipei, Okinawa, Bangkok, Phuket and Port Klang with mostly two-, three-, four-, five and seven-day cruises. According to Star Cruises, its source markets are geographically well diversified and offer a balanced mix of local, regional and international passengers.
According to Star Cruises, the company has its own sales offices in Singapore, Malaysia, Thailand, Hong Kong, China, Indonesia, Taiwan, Japan, India, Australia, Germany, Sweden and the U.S.
Next year, Star Cruises said it expects to bring about 350,000 passengers to Singapore, 300,000 to Hong Kong, 250,000 to Malaysia, 150,000 to Thailand, 150,000 to Taiwan, 100,000 to Japan, and 50,000 to China.
For the first two months of 1999, Star Cruises reported that passenger cruise days were up 60 percent compared to the same period last year.
In related news, Star Cruises has announced that it opened its own and Asia's first simulator center in Port Klang on March 18.
The S$43 million facility was built by STN Atlas Elektronik and is operated by the Danish Maritime Institute (DMI) on behalf of Star Cruises.
"One of the primary objectives is to establish Port Klang as a cruise and transportation hub complete with maritime services and facilities," said Dato KT Lim, chairman of Star Cruises. The simulator center will focus on Asian ports and cruising conditions.