Genting Hong Kong will push back the delivery of Crystal Endeavor and Global Dream for about a year, the group announced in a profit warning last week as the devastating impacts of Covid-19 crisis continue to roil its global cruise, entertainment and leisure business arms.
The decision to delay the delivery of both ships, currently under construction at its MV Werften shipyards, was undertaken as part of Genting Hong Kong's cost saving measures amid the pandemic, the group announced in its earning guidance last week.
The 208,000 gross ton Global Dream, the first of Dream Cruises' Global class ship, was originally scheduled to enter service in early 2021. Delivery of new expedition cruise ship Crystal Endeavor, earlier planned for debut in August and subsequently November 2020, is also pushed back.
No new delivery dates for the two ships were specified.
The consolidated operating loss of Genting Hong Kong for the six months ended 30 June 2020 is expected to reach US$600 million, which is "significantly higher" than US$56.5 million for the corresponding period in 2019.
This is due to the suspension of operations across the group's cruise businesses (Dream Cruises, Crystal Cruises and Star Cruises), suspension of its shipbuilding operations at MV Werften's shipyards in Germany, and severely restricted operations and revenue generation at its entertainment and leisure businesses (Resorts World Manila and Zouk, Singapore).
The update is based on a preliminary review of its unaudited accounts, with results for the period ended June 30 to be expected by the end of August.
Genting Hong Kong expects the Covid-19 pandemic will continue to affect the group's businesses, as the spread and development of the virus has created significant uncertainty over when authorities in the relevant cruising markets will allow resumption of the cruise travel.
With the exception of the Explorer Dream, which has commenced domestic voyages in Taiwan on 26 July 2020, and the SuperStar Aquarius and SuperStar Gemini, which have been leased to the Singapore Government, the rest of Genting Hong Kong's ships are currently laid up.
The group has suspended all capital expenditures other than that required to maintain the safety and security of its ships and the health and safety of its guests and employees. It has also reduced onshore operating expenses in respect of employee costs (headcount, salary reductions and the implementation of no pay leave) and overhead expenses.
Meanwhile, the group is looking to improve its debt maturity profile by securing a deferral of up to 12 months for principal repayments amounting to approximately US$220 million; seeking additional sources of finance from Germany's Economic Stabilization Fund to fund the resumption of construction work at the shipyards; and securing additional sources of finance to maintain its cruise businesses pending resumption of sailing.