# Star/Norwegian Cruise Line’s financial woes



## fred henderson (Jun 13, 2005)

Star Cruise Line’s financial situation seems to be going from bad to worse. It announced last month that it had signed a provisional agreement with Louis Cruise Lines to sell them Norwegian Dream for $218million and Norwegian Majesty for $162million. At the time of announcement, Star said it was doing this to strengthen its capital structure! Star has now notified the Hong Kong Stock Exchange that there will be a delay in finalising the sale contract.

The 2007 operational results of the big three cruise companies were: -

Carnival:
Total Revenue $13.033 billion
Operating costs $10.308 billion – 79.09% of Revenue
Operating profit $2.725 billion – 20.91% of Revenue
Finance costs $0.301 billion – 2.31% of Revenue
Net Profit $2.424 billion – 18.60% of Revenue

Royal Caribbean:
Total Revenue $6.149 billion
Operating costs $5.248 billion – 83.58% of Revenue
Operating profit $0.901 billion – 16.42% of Revenue
Finance costs $0.298 billion – 4.30% of Revenue
Net Profit $0.603 billion – 12.12% of Revenue

Star:
Total Revenue $2.576 billion
Operating costs $2.497 billion – 96.93% of Revenue
Operating profit $0.079 billion – 3.07% of Revenue
Finance costs $0.275 billion – 10.68% of Revenue
Net Loss $0.196 billion – 7.61% of Revenue

In 2007 Carnival made $42.41 profit per passenger/day; Royal Caribbean made $22.66 profit per passenger/day; Star/NCL lost $16.55 per passenger day. Star is operating in US dollars and borrowing in Euros. The company is beginning to look somewhat shaky. 

Fred


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## Jeff Taylor (Oct 13, 2006)

Apollo usually doesn't throw its money away. They must have something in mind, unless the breakup value exceeds its going concern value.


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