Regent Seven Seas Cruises, the luxury market brand in the Prestige Cruise Holdings group, recorded a slight fall in second quarter operating profit (EBITDA) on dry docking of a ship, but says net yield rise gives reason to be pleased with the figures.
Adjusted EBITDA was $24.6 million on revenue of $122.8 million for the second quarter of 2011 compared to Adjusted EBITDA of $25.3 million on revenue of $110.5 million for the second quarter of 2010. “In the second quarter of 2011, we had a 4.1 percent reduction in capacity caused by a scheduled drydock for Seven Seas Mariner. There were no drydocks in the second quarter of 2010,” regent said in a statement.
Net Yield for the second quarter was up 6.2 percent driven by a strong rise in pricing with Net Per Diem up 4.8 percent and occupancy increasing 1.2 percentage points. Commenting on the second quarter, the Company’s chairman and CEO, Frank Del Rio, stated, “We are extraordinarily pleased with the performance of the brand in the second quarter. Our strategy of delivering the industry’s most all-inclusive luxury cruise experience is resonating well in the marketplace and is reflected in our strong Net Yield growth.”
Net Cruise Costs, excluding Fuel and Other expenses, per APCD was up less than 1 percent increasing to $270 in 2011 compared to $268 in 2010. Fuel was up 32.3 percent, or $2.5 million, reflecting higher prices. “Our effective economic hedging strategy was able to partially offset this increase, as we recognized a $1.6 million cash benefit on executed fuel hedge contracts during the quarter that offset 65.8 percent of this increase. The realized gain of fuel derivatives was recorded in other income (expense) as these instruments do not qualify for hedge accounting,” Regent said.
Other expenses were up $3.3 million primarily attributable to a 10-day scheduled drydock for Seven Seas Mariner in 2011. “During the second quarter of 2011, we successfully issued $225 million of new senior secured notes and used a portion of the proceeds to extinguish our second lien term loan and prepay $29 million of our first lien term loan. As part of this transaction, we recorded a loss on early extinguishment of debt of $7.5 million due to the write-off of previously deferred financing costs and prepayment penalties,” the company commented.