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NCLH accounting gain, share sales lift Genting HK to record profit

NCLH accounting gain, share sales lift Genting HK to record profit
A whopping one-off accounting gain related to Norwegian Cruise Line Holdings plus hefty proceeds from the sale of NCLH shares helped lift Genting Hong Kong to a record first half profit of US$2.16bn. That was up from $216.7m in the first six months of 2014.

A one-off accounting gain of $1.57bn was related to reclassifying NCLH from an 'associate' of the group to an 'available for sale' investment in May, when Genting reduced its stake to 17.7% from 22%. (A further share sale in August put Genting's current stake in NCLH at 13.3%.)

Gains of $212.5m and $387.1m from large NCLH share sales in March and May generated a total of $863.9m net sale proceeds.

Earnings before interest, taxation, depreciation and amortization were up 46.5%, to $29.6m from $20.2m.

Revenue from cruise and cruise-related activities increased 2.5% to $265.1m. Net revenue rose 6.4% to $218m on more capacity days—1.37m, up from 1.29m—mainly due to the acquisition of Crystal Cruises, completed on May 15. Occupancy edged up to 69.4% from 68.7%.

Stable net yield was attributed to higher ticket revenue resulting from the Crystal acquisition offset by lower on-board revenue due to lower gaming revenue.  

Meanwhile, revenue from non-cruise activities dropped more than 56%, to $10m, mainly due to lower income from aviation, travel agent businesses and the international marketing activities in relation to Genting's Manila operations.

Operating costs, not counting depreciation and amortization, held stable at $199m as additional operating expenses related to the Crystal acquisition were offset by lower operating expenses at Star Cruises, primarily from reduced fuel and on-board expenses. Selling, general and administrative expenses decreased nearly 26% to $46.3m mainly due to the absence of certain non-recurrent promotional spending, despite additional SG&A expenses from Crystal.

Genting HK's share of profit from NCLH went to $2.9m, down from $46.9m in the first half last year, because of the company's reduced equity stake in NCLH, the accounting reclassification and lower NCLH profit.

Genting HK said its cash position had strengthened to $786.1m at June 30, up from $260.1m on Dec. 31, 2014.