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Cruise News for the Corporate Travel Professional

March 2014 Edition

Fred. Olsen books NOK411 million impairment charge against fleet

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Fred. Olsen Cruise Lines (FOCL), which is jointly owned by Olsen family's two listed holding companies Ganger Rolf and Bonheur, has booked an NOK450 million impairment charge against its fleet of four vessels, Ganger Rolf said in a statement, adding that this dragged both the final quarter and full year 2013 results deep to the red.

"After an evaluation of estimated market values versus booked values of the vessels at year-end, FOCL has written down the book values of MV Braemar by NOK 145 million, MV Balmoral NOK 179 million, MV Boudicca NOK 46 million and MV Black Watch NOK 40 million," Ganger Rolf said.

Braemar is of 24,000 gross tons and it was built in 1993, while Balmoral is five years older and measures at 45,000 gross tons. Boudicca and Black Watch are of 28,000 gross tons and date to 1972-73. All ships are operated on the British market.

The news came about a week after All Leisure group, the listed British boutique cruise shipping company, had booked a £6.7 million charge against the 1972 built Discovery of 20,636 gross tons. The company said the values of mature cruise vessels had fallen markedly in recent times.

FOCL operating revenues in the final quarter of 2013 were NOK 349 million (NOK 337 million in 2012), while operating result before depreciation (EBITDA) was NOK - 9 million (NOK 15 million) and net result was NOK - 537 million (NOK -44 million). "Net result in the quarter is significantly influenced by an impairment of NOK 411 million on the cruise vessels," Ganger Rolf said.

For full year 2013,, FOCL had operating revenues of NOK 1,470 million (NOK 1,628 million). EBITDA were NOK 65 million (NOK 193 million) and net result was NOK - 637 million (NOK - 85 million), Ganger Rolf stated.

"The UK cruise market’s difficult economic conditions and overcapacity continued to result in lower sale and occupancy. The number of passenger days totaled 292 542 (301 935) for the quarter. Net ticket income per diem was 1 % lower compared to the corresponding quarter last year. The average spot price of fuel oil in the quarter was in line with 4 quarter 2012" Ganger Rolf commented.