Genting Hong Kong Limited issued an interim profit warning through the Hong Kong Stock Exchange Monday.
Best known in the territory as the operator of cruise lines, Star Cruises, Genting said it expected to make a loss of between US$60m and US$75m for the six months ended 30 June 2016. For the sane period last year, the company declared a profit of US$2.1bn.
The company said that the loss was attributable to firstly, the absence of a one-off accounting gain of US$1,567.4m recognised arising from the reclassification of the Group’s investment in Norwegian Cruise Line Holdings Ltd from “Interest in associates” to “Available-for-sale investments” in May 2015 and a total gain of US$599.6m arising from the disposals of certain stakes in NCLH in the six months ended 30 June 2015.
The one-off start-up and marketing costs for the launch of the new Dream and Crystal cruise brands and products in 2016 and higher overall operating and selling, general and administrative expenses were also said to have played a part in the expected poor results.
Genting has been operating the Star Cruises fleet out of Hong Kong since 1993. But with a growing middle class in the region that has seen the number of Asian cruisers grow from around 775,000 in 2012 to close to 2m this year, the company will be banking on a shift in focus to the high-end consumers with the launch of Asia’s first luxury cruise line, Dream Cruises, later this year.
The new venture will operate two new luxury vessels – Genting Dream (late 2016) and World Dream in late 2017.
To further capitalize on the growing demand for new cruise ships and to realize the company’s own expansion plans, Genting Hong Kong established the Lloyd Werft Group in 2016 through the acquisitions of Lloyd Werft shipyard in Bremerhaven and Nordic Yard’s three shipyards in Wismar, Warnemunde and Stralsund, Germany.