The results figure in a one-off gain of $205m for the sale of shares in Norwegian Cruise Line Holdings and The Star Entertainment Group, and the absence of a $305m impairment for NCLH shares in 2016.
These are offset by start-up losses for Dream Cruises' World Dream in Hong Kong and the respositioning of Genting Dream to Singapore in November, and losses from Crystal Cruises' brand extensions in river cruises and the launch of Crystal AirCruises.
The company said Dream Cruises, launched slightly more than a year ago, is perfoming well with improving occupancies and net yields in both the Hong Kong/Guangzhou and Singapore markets. However, the arrival of competitors' new and larger ships caused smaller, older ships to reposition to ports where Star Cruises ships operate, creating downward pressures on occupancies and yields. The company added the situation should improve as competitors have announced an approximate 18% capacity reduction by the end of this year.
Crystal faced significant competition in 2017 as new ships were introduced by competitors to the tune of an approximately 16% increase in luxury berths. The renovation of Crystal Symphony late last year and of Crystal Serenity late this year are decreasing capacity, adding suites and facilitating open-seating dining, which Genting HK called 'an essential feature' for Crystal to compete more effectively.
Meanwhile, shipyard cluster MV Werften recorded a full year of start-up losses in 2017, compared to eight months of losses in 2016. Genting HK said the steel-cutting for Crystal's Endeavor-class expedition ships and Star Cruises' Global-class ships in 2018 are expected to capitalize the shipbuilding cost as part of the newbuilds.
Further factors are additional depreciation and amortization of the shipyards, along with new Dream and Crystal ships, as well as additional finance costs for these vessels.
In its notice to the Hong Kong Stock Exchange, Genting HK said these projections are based on a preliminary assessment and 2017's audited consolidated results are expected to be announced in March. Also, the company may make a supplemental announcement after the Travellers results are reported.
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