Genting Hong Kong has announced that it expects to record a consolidated net loss of between US$240 million and US$270 million for the year ended 31 December 2017, narrowed from a loss of US$537 million in 2016.
In a filing to the Hong Kong Stock Exchange, the company attributed its expected loss to “start-up losses the Dream Cruises brand for World Dream arrived in Hong Kong and the re-positioning of Genting Dream to Singapore in November 2017” as well as other brand extensions. It added that the narrowing of losses was a result of US$205 million gained from the sale of shares in Australian casino operator Star Entertainment Group as well as Norwegian Cruise Line Holdings Ltd.
“Dream Cruises, launched slightly more than a year ago, is performing well with improving occupancies and net yields in both the Hong Kong/Guangzhou and Singapore markets,” Genting Hong Kong noted in its filing.
“However, the arrivals of new and large ships of competitors have caused smaller and older ships to relocate to ports where Star Cruises ships are positioned, creating downward pressures on occupancies and yields.
“This situation is expected to improve as competitors had announced approximately 18% reduction in capacity by the end of this year. Crystal Cruises faced significant competition in 2017, as competitors have launched new luxury ships, leading to approximately 16% increase in berth capacity in the luxury sector. The renovation of Crystal Symphony late last year and Crystal Serenity late this year with less passengers, more suites and an additional Chinese restaurant will enable free seating, an essential feature for Crystal Cruises to compete more effectively in the luxury sector.”
Genting Hong Kong said it is still awaiting the full year financial results from Travellers International Hotel Group, its partner in Resorts World Manila, with results expected to be finalized in March.