Star suffers massive loss

Star Cruises collapsed even further into the red on currency translations and fuel expenses, but will reap gains from its Apollo deal in 2008.

Star reported a loss of $201M for full-year 2007 and a loss of $124M for 4Q07, versus losses of $156M for 2006 and $148M for 4Q06. Stripping out various non-operating factors such as currency, Star’s losses totaled $157M in 2007 versus $104M in 2006. Star’s Asian division saw 4Q07 revenue increase 21% on higher capacity, but this was counterbalanced by a 2.6% drop in yield and a 7% hike in operating costs, due to fuel and charter fees. Star’s NCL unit in North America grew 4Q07 revenue by 15% on 4% more capacity and an impressive 11% jump in yields. NCL’s fuel prices shot up 46% in 4Q07, but operating expenses grew only 5% thanks to lower payroll and startup costs. Apollo’s $1bn equity infusion into NCL closed on 7 January, and Star said that it would record a gain of $74M in 2008 from that transaction. Star stressed that the Apollo deal will allow it to “concentrate its management and financial resources on its Asia-Pacific/Greater China cruise businesses”.

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