Genting HK expects US$500 million net loss in 2016

Genting Hong Kong Ltd. says it expects to record a consolidated net loss of US$500-550 million for the year ended Dec. 31, 2016, according to a filing on Monday.

The net loss for the year compares to a consolidated net profit of US$2.1 billion recorded in the full-year 2015.

According to the cruise casino operator, the expected decline in performance of the company is mainly attributable a number of factors, including:(i) the absence of a one-off accounting gain of US$1.6 billion and a total gain of US$658.6 million arising from its investment in Norwegian Cruise Line Holdings Ltd. in 2015, (ii) an impairment loss of approximately US$300 million on the group’s interest in NCLH ordinary shares caused by a decline in its fair value in late 2016; (iii) one-time startup and marketing costs for the launch of new Dream and Crystal cruise brands and products in 2016; (iv) additional depreciation and amortisation from new Dream and Crystal cruise ships and newly acquired German shipyards; as well as (v) start-up, reorganization and acquisition related costs arising from its shipyard operations and newbuilding activities.

“Despite the decline in its consolidated net results, the Group is expected to record an improvement on its underlying cruise business excluding the one-time startup costs of its new Dream and Crystal cruise ships,” said Genting in its filing.