Norwegian Cruise Line (NCL) reported a net loss of $2.6 million, or $0.02 per share, on revenues of $767.6 million for the year ended Dec. 31, 1998, compared to net income of $1.0 million, or $0.01 per share, on revenues of $651.8 million for 1997.
NCL reported 3.4 million passenger cruise days and a load factor of 95.9 percent for 1998, compared to 3.3 million passenger days and a load factor of 103.2 percent for 1997.
For the fourth quarter ended Dec. 31, 1998, NCL reported a net loss of $12 million, or $0.05 per share, on revenues of $192.2 million, compared to a net loss of $7.2 million, or $0.03 per share, on revenues of $165.5 million for the fourth quarter of 1997.
NCL also reported 911,506 passenger cruise days and a load factor of 89.9 percent for the fourth quarter of 1998, compared to 844,984 days and a load factor of 99.4 percent for the fourth quarter of 1997.
NCL attributed the increase in revenues primarily to the addition of the Norwegian Majesty in September 1997, charter revenue from the Aida starting in October 1997, and the acquisition of Orient Lines in July of 1998.Additional revenue was also generated by the Norwegian Dream and the Norwegian Wind, which were lengthened in the first half of 1998.
These increases, however, were offset by reduced load factors in the first and fourth quarters, which NCL said were the result of price increases.
NCL also cited weak performances by the Norwegian Star and the Leeward, which incurred losses of $17.8 million and $3.6 million respectively.
Some of the European sailings of the Norwegian Dream and the Norway also suffered from weak occupancy levels. As the Norway also had sprinklers installed during the fourth quarter, her capacity was reduced accordingly in the period.
In addition, NCL said it paid higher travel agent commissions than the industry average.
To reduce the losses, NCL last year transferred the Norwegian Star to Norwegian Capricorn Line, a joint Australian venture. The larger Norwegian Sea has taken over NCL's Houston program and the company said it anticipates a "small profit" from those sailings in 1999.
NCL has also shortened the Norway's 1999 program in Europe and will stay in the Caribbean year round in 2000.
Also in 1999, the company will conclude the charter agreement not only for the Leeward, but also for the 800-passenger Norwegian Dynasty.
NCL has also capped air-ticket commissions at 10 percent and reduced general commission levels closer to those of competitors.
But adding to the cost side in 1999 will be a scheduled drydocking and refurbishment of the Norway and refurbishment of the Norwegian Sea.
Caribbean: Year-round seven-day cruises will be offered by the Norway and the Norwegian Sea.
The rest of the fleet will sail seasonally in the Caribbean except the Norwegian Crown. All the Caribbean cruises are seven days except for the Norwegian Majesty which sails three and four days.
South America: The Norwegian Crown continues its winter program.
Alaska: NCL will have two ships in Alaska, the Norwegian Sky sailing from Seattle and the Norwegian Wind from Vancouver.
Bermuda: The Norwegian Crown and the Norwegian Majesty continue their programs.
Europe: The Norwegian Dream will spend the summer in Europe.
Australia: The Norwegian Star continues her Australia program under the banner of Norwegian Capricorn Line.
While NCL will receive the new Norwegian Sky this summer and also take delivery of the lengthened Norwegian Majesty, no further definite expansion plans have been announced.
However, the company has stated that it will pursue further capacity expansion through a continued newbuilding program and that it intends to add a ship to Orient Lines in 2000.
A U.S. listing of NCL's shares is also part of the plans for 1999.
According to NCL, capacity days will increase by 10 percent in 1999 and by eight percent in 2000. Yield will be up by $7 in 1999 if prices remain constant due to the change in fleet mix.
As of the end of February, NCL announced that 76 percent of budgeted revenue for the NCL brand for 1999 was already booked compared to 69 percent a year ago, and that ticket revenue was 26 percent higher than last year.