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Genting Hong Kong reports $244.3 million loss for 2017

Revenue from cruise and cruise-related activities of the Genting Hong Kong Group increased 11.9% to US$1,016.0 million in 2017 compared with US$908.1 million in 2016. Net Revenue in 2017 increased 14.0% to US$786.0 million from US$689.7 million in 2016 due to an increase in capacity days of 33.7%. The increase in capacity days was primarily due to the inclusion of full year operation of Genting Dream and Crystal Mozart as well as the launch of World Dream, Crystal Bach and Crystal Mahler during 2017.

Loss for the year of the Group improved from US$504.2 million in 2016 to US$244.3 million in 2017. The reduction in loss is mainly attributable to a number of factors including:

– One-off gain of US$205.0 million in respect of the disposal of certain available-for-sale investments and the absence of an impairment loss on ordinary shares in Norwegian Cruise Line Holdings Ltd. of US$305.0 million in 2016; offset by:
– Start-up losses in the Dream Cruises brand for World Dream that arrived in Hong Kong and the re- positioning of Genting Dream to Singapore in November 2017, Crystal Cruises brand extensions in river cruises and the launch of AirCruises;
– Dream Cruises, launched slightly more than a year ago is performing well with improving occupancies and net yields in both the Hong Kong/Guangzhou and Singapore markets. However, the arrivals of new and large ships of competitors have caused smaller and older ships to relocate to ports where Star Cruises ships are positioned, creating downward pressures on occupancies and yields. This situation is expected to improve as competitors had announced approximately 18% reduction in capacity by the end of this year. Crystal Cruises faces significant competition in 2017, as competitors have launched new luxury ships, leading to approximately 16% increase in berth capacity in the luxury sector. The renovation of Crystal Symphony in late 2017 and Crystal Serenity in late 2018 with less passengers, more suites and an additional Chinese restaurant will enable free seating, an essential feature for Crystal Cruises to compete more effectively in the luxury sector;
– MV Werften recorded a full year start-up losses in 2017 as compared to an eight months losses in 2016. However, with the steel cutting for both the Endeavor Class and Global Class ships in January and March 2018 respectively, the Group will capitalise the shipbuilding cost as part of the new builds;
– Additional depreciation and amortisation of the shipyards along with new Dream and Crystal vessels; and
– Additional finance costs on new Dream and Crystal vessels.

The Directors have recommended a final dividend of US$0.01 per ordinary share for the year ended 31 December 2017 (2016: US$0.01 per ordinary share), which will be payable subject to shareholders’ approval at the 2018 Annual General Meeting of the Company.

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