Regent Seven Seas Reports Record Second Quarter Revenue, Lower EBITDA
By Theresa Norton Masek
August 09, 2012 10:17 AM
Regent Seven Seas Cruises reported record revenues for the second quarter of $131.5 million, compared to $122.8 million in the second quarter of 2011. Adjusted EBITDA was $19.4 million, compared to $24.6 million for the same period last year. The company attributed the decline to additional product costs from the increased inclusive product offerings added because of the soft market in Europe and the reduction in capacity when Seven Seas Navigator was placed in dry-dock. Net yield was up 2.8 percent driven by an 8.5 percentage point increase in the occupancy rate. The numbers are in line with the estimates released July 31.
“We are pleased with our second quarter revenue and net yield increases over the prior year considering the backdrop of a challenging European environment,” said Frank Del Rio, Regent’s chairman and CEO. “In order to drive demand for our softer European sailings, we chose to include additional value in our already industry leading all-inclusive product offerings rather than discount cruise fares. This non-discounting strategy is consistent with our longstanding go-to-market philosophy and reinforces our brand’s high value proposition, but it did increase product offering costs for the quarter. We believe that our steadfast refusal to discount our luxury product has positioned the brand well for the upcoming year. This can be seen in our booking patterns for 2013 sailings as occupancy build is stable while pricing is up in the high single digits compared to same time last year for 2012.”
Capacity during the second quarter of 2012 decreased to 163,170 available passenger cruise days, approximately 1.1 percent versus the same period last year, due to the scheduled dry-dock of the Seven Seas Navigator. Net cruise cost, excluding fuel and other expenses, was $47.1 million compared to $44.5 million for the second quarter of 2011. The company said the change is primarily due to increased hotel services costs driven by an increase in occupancy of 8.5 percentage points as well as increased deck and engine expenses primarily associated with a new five-year partnership with Wartsila to maintain the engines throughout the fleet.
Fuel expense was $10.4 million compared to $8.6 million for the second quarter of 2011. As of June 30, 2012, the company has hedged approximately 80 percent of the remaining expected fuel consumption for 2012, 52 percent of expected fuel consumption for 2013 and 28 percent for 2014. Other expense was $5.8 million, compared to $5.3 million for the second quarter of 2011, due to the Seven Seas Navigator dry-dock.