Genting Hong Kong warns of US$1.5 billion loss for FY20

Global cruise ship giant Genting Hong Kong has issued a profit warning on expected losses of at least US$1.5 billion for the year ended 31 December 2020.

The company said via a Hong Kong Stock Exchange announcement late Friday that a preliminary review of its accounts has revealed a “consolidated operating loss of not less than US$600 million and a consolidated net loss of not less than US$1.5 billion” for the year, widened from US$96 million and US$159 million respectively in 2019 due to the effects of COVID-19.

More specifically, it pointed to the suspension of fleet-wide operations across its cruise-related businesses for Dream Cruises, Crystal Cruises and Star Cruises – as well as the suspension of shipbuilding operations at its MV Werften shipyards in Germany from March to October 2020 – which resulted in “impairment losses being recorded on certain intangible assets, property, plant and equipment and other assets and loss on disposal of interest in certain subsidiaries which owned non-core assets.”

The substantial US$1.5 billion loss comes after Genting Hong Kong last year suspended all payments to the group’s financial creditors in an effort to preserve liquidity, stating at the time that it would reserve “remaining available cash to maintain critical services for the group’s operations,” and citing debts of around US$3.4 billion.

It was recently revealed the company was in talks with the German government over a potential US$600 million rescue package to save MV Werften from insolvency.

There was some good news in Friday’s filing, however, with Genting Hong Kong announcing that one of its cruise ships, Crystal Serenity, will start sailings from Nassau and Bimini as of July 2021 – becoming the first ocean ship to sail from the Americas since the cruise industry’s voluntary halt in operations almost a year ago.

“With the resumption of Crystal Serenity, Genting Cruise Lines will have 41% of its entire fleet in operation (based on total lower berths), the highest proportion of all cruise companies in the world, following the restart of Dream Cruises’ Explorer Dream in July 2020 in Taiwan and World Dream in Singapore in November 2020,” the company said.

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