NCL still losing cash

[electricron]

USA Today news:

http://www.usatoday.com/travel/cruises/item.aspx?type=blog&ak=64932821.blog

 

It's not as bad as it looks.

 

It looks like Norwegian Cruise Line lost around $200 million in 2008. NCL recorded a loss of $128.8 million as a result of the cancellation of its order to build a second "F3" ship.

 

That's only a loss of $71 million from operations in a year where two ships changed itineraries rapidly.

(Aloha from Hawaii to Miami as the Sky, Hawaii from Hawaii to Europe as the Jade)

[njhorseman]

USA Today news:

http://www.usatoday.com/travel/cruises/item.aspx?type=blog&ak=64932821.blog

 

It's not as bad as it looks.

 

 

 

That's only a loss of $71 million from operations in a year where two ships changed itineraries rapidly.

(Aloha from Hawaii to Miami as the Sky, Hawaii from Hawaii to Europe as the Jade)

 

 

The USA Today reporter who wrote this piece made a huge blunder. He concludes because Star, NCL's 50% owner, reported a $104 million dollar loss in 2008, that NCL must have lost $208 million (104 times 2). He's totally ignored the fact that NCL's not Star's only business. Star also operates a fleet of 5 ships in Asia, and we have no idea what the financial results are for that fleet. Whatever the Star brand ships made or lost is a significant contributor to Star's bottom line.

[Seanote]

The USA Today reporter who wrote this piece made a huge blunder. He concludes because Star, NCL's 50% owner, reported a $104 million dollar loss in 2008, that NCL must have lost $208 million (104 times 2). He's totally ignored the fact that NCL's not Star's only business. Star also operates a fleet of 5 ships in Asia, and we have no idea what the financial results are for that fleet. Whatever the Star brand ships made or lost is a significant contributor to Star's bottom line.

 

No blunder. Star's net loss was $79.5 million for the year. The cause of the loss was a loss of $104 million due to Star's 50% ownership of NCL. Meaning, that without the charge for NCL, Star Cruise Lines actually made a profit from other operations.

[Don Haynes]

It apears the biggest loss was cancelling the second F3 ship. Otherwise, NCL turned an operational profit, something they should look forward to much more in the future. Especially having removed two ships from the Hawaiian market, earning more profits elsewhere.

 

Its a good thing NCL is a private company. The market has been very poor this year.

[njhorseman]

No blunder. Star's net loss was $79.5 million for the year. The cause of the loss was a loss of $104 million due to Star's 50% ownership of NCL. Meaning, that without the charge for NCL, Star Cruise Lines actually made a profit from other operations.

 

 

The cited article makes no reference to Star's loss for the year, which is what was confusing me.

 

I did find Star's 2008 financials, and see where the $104 million came directly from NCL.

 

Thanks for pointing that out.

[sjbdtz]

It apears the biggest loss was cancelling the second F3 ship. Otherwise, NCL turned an operational profit, something they should look forward to much more in the future. Especially having removed two ships from the Hawaiian market, earning more profits elsewhere.

 

Its a good thing NCL is a private company. The market has been very poor this year.

 

 

Actually, they lost $208M, of which $128M could be attributed to the settlement they reached with STX. That means they still lost $80M over the year. http://www.travelmole.com/stories/1135588.php

 

Don't forget that they dry-docked Sky, Jade, Spirit for renos / changes, rolled-out Gem, and presumably took a loss with severence pay for all of the Americans they let go from Hawaii.

 

They rolled-out 2.0, with the new bedding, mattresses, a 30% increase in food spend, etc. The results of this investment will be felt over a couple of years, not within the same fiscal.

 

They also took a hit on selling one of their ships.... .

 

 

It doesn't sound as if any of these issues is operational, or continuing....so barring unforeseen events, this next year should be profitable.

[CruisinMaterial]

I do hope next year's fiscal outlook is better for NCL. I was surprised to see that NCL only holds 10% of the entire North American market cruisers on that CNBC special. I do believe NCL is working in the right direction to get more people to buy their product by constantly changing it to target certain cruisers.

 

This past year wasn't so good for NCL with the STX dispute and the charge for the cancellation of the second F3. I thought NCL was nuts for doing it but after watching the CNBC special it actually makes sense for them to cut it because they've expanded their capacity so fast that they'd end up sailing empty ships until they get more of a strong hold on the N American cruise market. Their homeporting concept should help them out there though. :D Sailing from Boston is easy... I just wish they would go to the Caribbean from here and not just to Bermuda. It'd be a nice long jaunt but that's just me dreaming.

 

The fall through of the sale of the NCL Dream and still keeping that ship operational as a ghost ship in Bermuda isn't helping them at all. An unprofitable ship that is collecting dust only hurts the bottom line. I would hope that they off load that soon.

 

I do believe NCL will rally through this weak economic time and come out a much stronger cruise line than RCI or Carnival's brands. RCI is nickel and diming their pax to death and still thinks people will pay the same for cabins (higher than NCL). That will hurt them in the long run.

[Don Haynes]

I repeat as NJHorseman noted before, one doesn't figure out NCL's losses by doubling half owner Star Cruises profit sheet. Star cruises operates its own fleet separately from NCL.

[gtalum]

I do believe NCL will rally through this weak economic time and come out a much stronger cruise line than RCI or Carnival's brands.

 

They've got a shot at overtaking RCL, but I doubt CCL is going to yield the top spot anytime soon. CCL's financial picture is very strong.

[sjbdtz]

I repeat as NJHorseman noted before, one doesn't figure out NCL's losses by doubling half owner Star Cruises profit sheet. Star cruises operates its own fleet separately from NCL.

 

 

 

Star didn't REPORT the NCL loss.....they RECORDED it. That means it's a set item, apart from their own fleet.

[AFT_LOVER]

NCL sold SKY, DREAM & MAJESTY to Louis Cruises. We saw Dream, no artwork, all white in Boston in November. Majesty has no artwork, just bug black Majesty across the top area since she is Louis Cruise's & leased to NCL til Dec. Then the release that Sky sale fell thru but no reason stated so she was rehabed. Sky like Jade has a whole new look with casino added since both were former Hawaiian ships.

 

Stock market axed RCCL with a bad status when they hit $5 a share and still building biggest ships & how are they getting the money?

 

 

I do hope next year's fiscal outlook is better for NCL. I was surprised to see that NCL only holds 10% of the entire North American market cruisers on that CNBC special. I do believe NCL is working in the right direction to get more people to buy their product by constantly changing it to target certain cruisers.

 

This past year wasn't so good for NCL with the STX dispute and the charge for the cancellation of the second F3. I thought NCL was nuts for doing it but after watching the CNBC special it actually makes sense for them to cut it because they've expanded their capacity so fast that they'd end up sailing empty ships until they get more of a strong hold on the N American cruise market. Their homeporting concept should help them out there though. :D Sailing from Boston is easy... I just wish they would go to the Caribbean from here and not just to Bermuda. It'd be a nice long jaunt but that's just me dreaming.

 

The fall through of the sale of the NCL Dream and still keeping that ship operational as a ghost ship in Bermuda isn't helping them at all. An unprofitable ship that is collecting dust only hurts the bottom line. I would hope that they off load that soon.

 

I do believe NCL will rally through this weak economic time and come out a much stronger cruise line than RCI or Carnival's brands. RCI is nickel and diming their pax to death and still thinks people will pay the same for cabins (higher than NCL). That will hurt them in the long run.