The Star Cruises Group reported net income of $33 million, or $0.62 per share, on revenues of $580.9 million for the third quarter ended Sept. 30, 2005, compared to net income of $46.4 million, or $0.81 per share, on revenues of $495.9 million for the same quarter last year.
Star said that the increase in revenue was primarily due to a 11.5 percent increase in capacity and a 3.8 percent increase in net revenue yield. The capacity increase was because of the additions of the Pride of America and the Norwegian Jewel. The higher net revenue yield was attributed to an increase in ticket prices and higher onboard spending.
Occupancy was 107 percent in Q3 2005, compared to 108 percent in Q3 2004.
Star attributed the reduced net earnings to higher operating expenses, including higher fuel costs, higher crew expenses related to the U.S.-flag ships and start-up costs for the Norwegian Jewel and the Superstar Libra. In addition were also higher interest expenses driven both by higher outstanding debt and interest rates.
Norwegian Cruises Line had a 13 percent capacity increase in Q3 of this year compared to last year, with the additions of the Pride of America and Norwegian Jewel, partially offset by the transfer of the Norwegian Sea to Star Cruises.
NCL reported net revenue yield of 6.5 percent in Q3 (compared to 3.8 percent for the Star Group as a whole), which was attributed to higher cruise ticket prices and onboard revenue and the acquisition of POLY Nesian Adventure Tours, a tour-bus operator in Hawaii.
In the Asia/Pacific, Star Cruises' capacity was up 5 percent with the addition of the Superstar Libra (formerly the Norwegian Sea), but net revenue yield was down 5.5 percent, and occupancy was 96.5 percent compared to I 02.2 percent last year.
Star attributed the decreases to lower than average occupancy for the relocation of the Superstar Libra from Singapore to India and the showcasing of the ship in Mumbai.
In related news, Star Cruises, which deployed the Superstar Libra out of India this past September, has announced that the ship will move to the Mediterranean, sailing cruises ranging from seven- to 12-days, starting in June.
The 1988-built, 42,000-ton, 1,480-passenger Libra will homeport in Malta, and sail in the Eastern Mediterranean. Ports of call will include Civitavecchia, La Spezia, Olbia, Naples, Venice and Messina in Italy; Piraeus, Santorini, Corfu and Crete in Greece; Istanbul and Izmir in Turkey; Dubrovnik in Croatia; and Alexandria in Egypt.
"The deployment marks the expansion of the Sta Cruises' brand into further international markets backed by the Asian-style hospitality we are well known for," said COO Chong Chee-Tut in a prepared statement.
Star plans to sell its Mediterranean cruises not only in its core markets in the Asia/Pacific and the Middle East, but also in Europe.
The Superstar Libra's deployment in India is described as seasonal, ''bearing in mind the monsoon season on the west coast during the summer," said Chong.
Star reported net income of $43.6 million, or $0.82 per share, on revenues of $1.4 billion for the first nine months of 2005, compared to net income of $28.2 million, or $0.49 per share, on revenues of $1.3 billion for the first nine months of 2004.
For Q3 2005, the North American market generated $444.9 million, or 77 percent, of the revenues of the Star Group; the Asia/Pacific markets generated $92 million, or 16 percent; with the balance attributed to "others."
North America also generated $53 million, or 68 percent, of the operating income, while the Asia/Pacific generated $20 million, or 26 percent.
NCL has also decreased its net yield guidance for 2005 to 6 percent to 7 percent over last year from its previous guidance of 7 percent to 8 percent, citing a combination of hurricanes and mild fall weather having a negative impact on bookings. The line said that repositioning of the Norwegian Sun to Houston also led to higher than expected cancellations and required more discounting.
The outlook for 2006 is positive, however, with advance bookings and prices higher year-over-year.
In Hawaii, NCL has reported that the Pride of Aloha is now profitable and that all the ships there are achieving good rates and occupancy. Crew turnover continues to be an issue, however.
NCL only expects Hawaii to become profitable after the Pride of Hawaii enters service next year and all three ships have stabilized, and crew turnover has been reduced.
Last month, NCL also introduced its second ship in the year-round New York market, the Norwegian Spirit, which has joined the Norwegian Dawn.
In addition to the Pride of Hawaii entering service next summer, NCL has two more ships on order - both for deliveries in 2007.