August 19, 2003

Red ink at Star Cruises
Malaysian-based Star Cruises Group--which includes Norwegian Cruise Line and is now the world's third largest cruise group--today reported net losses of $29 million for the second quarter of 2003 and $31.2 million for the first half of 2003, accoding to U.S. accounting practices. That compares with net income of $29.5 million in first quarter 2002 and $35.9 million in first half 2002.

Star Cruises Group notes that second quarter performance was "severely affected by the weak passenger demand and vooking cancellations resulting from the Iraq conflict and the outbreak of Severe Acure Respiratory Syndrome (SARS)." It also notes that the second quarter result includes $3.9 million in expenses related to the SS Norway boiler explosion.

You can get the first quarter results here, according to U.S. accounting principles, or here, according to Hong Kong accounting principles.

Interestingly, the Hong Kong version of the quarterly report is a little more forthcoming about the status of Star Cruises' plans to refurbish the SS United States and the SS Independence for its U.S.-flag venture, NCL America,

It says "the intention with these two old passenger liners is to convert them to modern cruise ships in a combination of U.S. and European shipyards in a way that is more feasible, technically and economically, than building new cruise ships in their entirety in U.S. yards. The timing of such a major conversion project is under study but the Group remains focused in the immediate term on completing the first Project America ship now under construction in Germany and successfully introducing it and the re-flagged Norwegian Sky to Hawaii next year."

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