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Genting HK warns of first half loss on Crystal, yard, Genting Dream costs

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Genting Hong Kong chairman Tan Sri KT Lim at the keel-laying for Crystal Debussy and Crystal Ravel in May
Genting Hong Kong expects to post a US$200m to $220m loss in the first half, compared to a loss of US$73.7m a year ago, the company said in a profit warning to the Hong Kong Stock Exchange. Both periods' results exclude Travellers International Hotel Group.

The company cited an operating loss at Crystal Cruises due to a 'more competitive environment resulting from a 13.7% increase in new luxury ship capacity in the industry, higher marketing costs and start-up costs of new Crystal river ships and AirCruises operations.'

Also cited were half-year start-up losses versus two months in Genting HK's German newbuilding shipyards (MV Werften) as they gear up for steel-cutting for the Global class (Star Cruises) and Endeavor class (Crystal Yacht Expedition Cruises) ships in March 2018.

Further factors are additional depreciation and amortization of the new Genting Dream (Dream Cruises) and shipyards, and additional interest for Genting Dream.

Genting HK said that despite the decline in its consolidated net results, the performance of the underlying core Asian cruise business has improved in the second quarter of 2017 compared to the first quarter, and the group remains positive on the underlying core Asian business for the second half.

Genting HK added it may make a supplemental announcement, if needed, after the results of Travellers are announced.

The company plans to release results for the first half of 2017 in August.