Posted on: Friday, November 12, 2004

Star Cruises reports 10 percent profit drop

By Vicki Kwong
Bloomberg News Service

Star Cruises Ltd., the world's third- largest cruise line operator, said third-quarter profit fell 10 percent as expenses and finance costs increased.

Star Cruises is the parent company of Norwegian Cruise Lines, which started interisland cruises aboard its U.S.-flagged ship, Pride of Aloha, in July.

Net income fell to $46.4 million, or 0.81 cents a share, from $51.6 million, or 1.04 cents, a year earlier, the company said. Sales rose 6 percent to $478.7 million.

Star Cruises, partly owned by Malaysia's Resorts World BHD, said operating expenses rose 16 percent to $294 million because of rising costs for its North American fleet. The sale of two ships in January and February also reduced passenger capacity, compared with a year earlier.

Star Cruises introduced last month a surcharge for its Asia- Pacific cruises to cover higher fuel costs. The price of crude oil, despite falling in recent days, is is still roughly 50 percent higher than a year ago. Crude oil touched a record high of $55.67 a barrel on Oct. 25.

The company imposes a surcharge of between $2 and $4 a person per night on its Asia-Pacific cruises.

For the first three quarters of the year, Star Cruises said its net income almost doubled to $28.2 million. Sales rose 2.5 percent to $1.25 billion.