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Ship cancellation brings $128m NCL loss
Tuesday, 02 Apr, 2009
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Norwegian Cruise Line has suffered a $128.8 million loss through the cancellation of a contract to build a second F3-class ship.
The “impairment loss” for cancelling the proposed sister ship to Norwegian Epic was disclosed in the 2008 results from part-owner Star Cruises Group.
NCL Corporation, the Bermuda-based parent of Norwegian Cruise Line and NCL America, originally ordered two F3 ships in 2006 with an option for a third.
But the second ship was cancelled at the STX Europe yard in France and the company decided against taking up the option on the third.
The Star Cruises statement said NCL Corp’s cost for cancelling the second ship included payments to the ship yard, loan and deferred financing fees and capitalised interest.
Asia-based Star said its share of loss of jointly controlled entities [NCL} came in at $104 million, suggesting the full loss at NCL of around $208 million for 2008.
Star, NCL’s 50% shareholder, recorded a net impairment loss of $99.9 million for 2008. The operating deficit before the impairment loss was $15.6 million.
NCL’s net revenue yield was up by 6.9% helped by higher pricing and onboard spend.
This included improved on board gambling revenues and the sale of art on ships.
But changes to the fleet led to a 3.7% drop in capacity days as four ships left the fleet between April 2007 and November 2008. Pride of Aloha was re-flagged as Norwegian Sky in July last year and Norwegian Gem joined the fleet in October 2007.
Average fuel prices rose by 41.5% to $561 per metric ton in 2008.
NCL also took a loss of $2.6 million from the 2007 sale of the ship Oceanic.
by Phil Davies
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