genting hong kong - 致股東中期報告 interim report to ...hong kong sar tel: (852) 23782000...

麗星郵輪有限公司 *（於百慕達持續經營的有限公司—註冊編號29337）

致股東中期報告截至二零零一年六月三十日止三個月及六個月

* 僅供識別

INTERIM REPORT TO SHAREHOLDERSfor the three months and six months ended 30 June 2001

CONTENTS

Page

Corporate Information 1

Consolidated Profit and Loss Accounts 2

Consolidated Balance Sheet 3

Consolidated Cash Flow Statements 4

Consolidated Statements of Recognised Gains and Losses 4

Notes to the Accounts 5

Interim Dividend 12

Financial Review 12

Directors’ Interests in Equity Securities 14

Substantial Shareholders 15

Practice Note 19 to the Listing Rules 16

Purchase, Sale or Redemption of Shares 16

Corporate Governance 16

STAR CRUISES LIMITED(Continued into Bermuda with limited liability)

Interim Report for the three months and six months ended 30 June 2001

1 Interim Report

Corporate Information

Board of Directors

Dato’ Lim Kok Thay

Chairman, President and Chief Executive Officer

Mr. Alan Howard Smith, J.P.

Deputy Chairman and Independent Non-executiveDirector

Mr. Chong Chee TutExecutive Director and Chief Operating Officer

Mr. William Ng Ko SengExecutive Director and Executive Vice President

Mr. David Colin Sinclair VeitchExecutive Director, President and Chief ExecutiveOfficer of NCL Holding ASA

Mr. Tan Boon Seng

Independent Non-executive Director

Mr. Lim Lay Leng

Independent Non-executive Director

SecretaryMs. Louisa Tam Suet Lin

Assistant SecretaryMr. Tan Wooi Meng

A.S. & K. Services Ltd.

Registered OfficeCedar House,

41 Cedar Avenue,

Hamilton HM12, Bermuda

Corporate OfficeSuite 1501, Ocean Centre,

5 Canton Road,Tsimshatsui, Kowloon,

Hong Kong SAR

Bermuda Principal RegistrarButterfield Corporate Services Limited

Rosebank Centre,

11 Bermudiana Road,

Pembroke,

BermudaTel: (441) 2951111

Fax: (441) 2956759

Hong Kong Branch RegistrarCentral Registration Hong Kong Limited

Rooms 1901-1905,19th Floor, Hopewell Centre,

183 Queen’s Road East,

Hong Kong SAR

Tel: (852) 28628628

Fax: (852) 28650990/25296087

Transfer AgentM & C Services Private Limited

138 Robinson Road,#17-00 Hong Leong Centre,

Singapore 068906

Tel: (65) 2280560/2280507

Fax: (65) 2251452

AuditorsMessrs PricewaterhouseCoopers,

Certified Public Accountants22nd Floor, Prince’s Building,Central, Hong Kong SAR

Internet Homepagewww.starcruises.com

Investor RelationsEnquiries may be directed to:

Ms. Louisa Tam Suet Lin

Company SecretaryHong Kong SAR

Tel: (852) 23782000

Fax: (852) 23143809

E-mail: [email protected]

Mr. Gerard Lim

Senior Vice President, Chief Executive OfficeKuala Lumpur, Malaysia

Tel: (603) 20306013

Fax: (603) 21613621

E-mail: [email protected]

2Star Cru ises L im i ted

The Board of Directors (the “Directors”) of Star Cruises Limited (the “Company”) presents the unauditedconsolidated accounts of the Company and its subsidiaries (collectively referred to as the “Group”) for the threemonths and six months ended 30 June 2001, as follows:

Consolidated Profit and Loss Accounts

Three months ended Six months endedNote 30 June 30 June

2001 2000 2001 2000US$’000 US$’000 US$’000 US$’000

unaudited unaudited unaudited audited

Turnover 2 327,231 361,790 662,613 552,545

Operating expenses (excludingdepreciation and amortisation) (202,603) (216,489) (415,159) (320,288)

Selling, general andadministrative expenses(excluding depreciation) (57,380) (55,942) (117,995) (86,927)

Depreciation and amortisation 3 (37,784) (36,661) (73,876) (60,433)

(297,767) (309,092) (607,030) (467,648)

Operating profit 2 29,464 52,698 55,583 84,897

Interest income 2,086 697 5,293 1,104Financial costs (30,172) (50,086) (66,958) (81,729)Other non-operating income/

(loss), net 2,291 (21) 7,176 1,610Share of losses of associated

company — — — (748)

(25,795) (49,410) (54,489) (79,763)

Profit before taxation 3,669 3,288 1,094 5,134

Taxation 4 (2,885) (2,317) (466) (4,430)

Profit after taxation 784 971 628 704

Minority interests — (1,911) — (2,248)

Net profit/(loss) for the period 784 (940) 628 (1,544)

Basic earnings/(loss) per share(US cents) 5 0.02 (0.03) 0.02 (0.05)

Fully diluted earnings pershare (US cents) * 5 0.02 N/A 0.02 N/A

Operating dataPassenger Cruise Days 1,765,362 1,892,788 3,459,543 2,881,640Capacity Days 1,812,404 1,913,627 3,621,108 2,986,199Occupancy as a percentage of

total capacity 97% 99% 96% 96%

* Diluted loss per share for the three months and six months ended 30 June 2000 are not shown as the diluted loss pershare is less than the basic loss per share.

3 Interim Report

Consolidated Balance Sheet

Note As at

30 June 31 December

2001 2000

US$’000 US$’000

unaudited audited

Intangible assets 633,918 639,036

Fixed assets 2,882,333 2,888,148

Restricted cash 150 150

Other assets 15,287 20,362

CURRENT ASSETS

Consumable inventories 26,743 28,329

Trade receivables 6 19,146 19,920

Prepaid expenses and others 50,840 37,946

Restricted cash 2,832 2,858

Cash and cash equivalents 183,448 292,508

283,009 381,561

CURRENT LIABILITIES

Trade creditors 7 59,025 76,092

Accruals and other liabilities 132,095 161,337

Short-term bank loans 2,000 —

Current portion of long-term bank loans 8 113,573 263,573

Amounts due to related companies 9 — 603

Advance ticket sales 208,294 126,478

514,987 628,083

Net current liabilities (231,978) (246,522)

Total assets less current liabilities 3,299,710 3,301,174

Financed by:

Share capital 414,407 414,108

Reserves 1,182,704 1,180,829

Shareholders’ funds 10 1,597,111 1,594,937

Long-term bank loans 8 1,692,467 1,696,044

Other long-term liabilities 9,958 10,025

Deferred taxation 174 168

3,299,710 3,301,174


Consolidated Cash Flow Statements

Three months ended Six months ended30 June 30 June

2001 2000 2001 2000US$’000 US$’000 US$’000 US$’000

unaudited unaudited unaudited auditedNET CASH INFLOW FROM OPERATING

ACTIVITIES 133,032 105,639 194,302 158,605

RETURNS ON INVESTMENTS ANDSERVICING OF FINANCEInterest paid (58,659) (35,945) (91,534) (59,585)Interest received 2,118 764 5,265 1,104

Net cash outflow from returns on investmentsand servicing of finance (56,541) (35,181) (86,269) (58,481)

TAXATION (480) (678) (713 ) (842)

INVESTING ACTIVITIESPurchase of fixed assets (64,480) (78,452) (152,487 ) (159,301)Proceeds from sale of fixed assets 43 87 90,503 102Acquisition of additional interests in

NCL Holding ASA — — — (513,844)Others — — (246) —

Net cash outflow from investing activities (64,437) (78,365) (62,230) (673,043)

Net cash inflow/(outflow) beforefinancing activities 11,574 (8,585) 45,090 (573,761)

FINANCING ACTIVITIESProceeds from short and long-term bank loans 11,579 69,712 55,210 580,827Principal repayments of long-term bank loans (182,400) (29,744) (206,787 ) (47,131)Proceeds from issuance of ordinary shares 10 125 833 245Proceeds from interest bearing loans

from related companies — — — 113,582Restricted cash 52 9,180 26 5,539Others, net (844) (7,840) (1,293 ) (6,804)

Net cash inflow/(outflow) fromfinancing activities (171,603) 41,433 (152,011 ) 646,258

Effect of exchange rate changes on cash andcash equivalents (606) (387) (2,139 ) (620)

Net (decrease)/increase in cash andcash equivalents (160,635) 32,461 (109,060 ) 71,877

Cash and cash equivalents at the beginningof the period 344,083 92,139 292,508 52,723

Cash and cash equivalents at the endof the period 183,448 124,600 183,448 124,600

Consolidated Statements of Recognised Gains and Losses


2001 2000 2001 2000US$’000 US$’000 US$’000 US$’000

unaudited unaudited unaudited auditedGains on financial instruments 611 — 611 —Exchange differences arising

on translation of subsidiaries (697) (631) (1,287 ) (927)

Net losses not recognised in theprofit and loss accounts (86) (631) (676 ) (927)

Profit/(loss) for the period 784 (940) 628 (1,544)

Total recognised gains/(losses) 698 (1,571) (48 ) (2,471)

5 Interim Report

Notes to the Accounts

1. PRINCIPAL ACCOUNTING POLICIES

The unaudited accounts of the Group have been prepared in compliance with Statement of Standard AccountingPractice (“SSAP”) 25 “Interim Financial Reporting”, and Appendix 16 of the Listing Rules of The Stock Exchange ofHong Kong Limited. The accounting policies and methods of computation used in the preparation of these accountsare consistent with those used in the annual accounts for the year ended 31 December 2000.

Intangible assets

The Group is currently amortising goodwill and other intangible assets over useful lives of 40 years which is in excessof the rebuttable presumption in SSAP 29 “Intangible Assets” and SSAP 30 “Business Combinations” that the usefullives of such assets should not exceed 20 years. SSAP 29 and SSAP 30 are effective for accounting periods commencing1 January 2001.

(a) The Group amortises goodwill arising from the purchase of NCL Holding ASA (“NCL”) totalling US$372.6 millionon a straight-line basis over 40 years which is consistent with the useful life of goodwill adopted by other leadingcruise companies. The Group believes that 40 years is a reasonable estimate of the useful lives of this goodwill asthe NCL business has been in operation since the 1960s and operates in a market that is expected to grow and inwhich there are barriers to entry given the major capital investment required.

(b) Intangible assets representing trade names and trademarks of Norwegian Cruise Line and Orient Lines of US$291.6million were recorded on the acquisition of NCL and are being amortised on a straight-line basis over 40 years.The Group considers that 40 years is a reasonable estimate of the useful lives of these assets as the trade namesand trademarks have already been in existence for many years (since 1960s). In addition, the Group incurs andintends to continuously incur significant advertising expenditure which supports the selection of a long useful lifefor these assets.

Drydocking expenses

Drydocking costs represent major inspection and overhaul costs and were already depreciated to reflect the consumptionof benefits, which are to be replaced or restored by the subsequent drydocking generally every two to three years. Inprior years, these drydocking costs, which were to be amortised within one year, were classified as current assets andthe remainder of such costs was included in other assets. Effective this year, the Group has included these drydockingcosts as a separate component of the ship costs in accordance with revised SSAP 17 “Property, Plant and Equipment”,where necessary, comparative figures have been reclassified to conform to the current period’s presentation.

2. TURNOVER AND OPERATING PROFIT

The Group is principally engaged in the operation of passenger cruise ships.

Turnover consists of revenues earned from cruise and cruise related activities and charter hire. Cruise and cruiserelated revenue comprises sales of passenger tickets, including, in some cases, air transportation to and from thecruise ship, and revenues from onboard services and other related services, including gaming, food and beverage.Charter hire revenue includes the lease operation of one passenger cruise ship and a catamaran to third party customers.

The amounts of each significant category of revenue recognised by the Group were as follows:

TURNOVERThree months ended Six months ended

30 June 30 June2001 2000 2001 2000

US$’000 US$’000 US$’000 US$’000unaudited unaudited unaudited audited

Cruise and cruise related activities 323,041 357,604 655,747 545,625

Charter hire 4,190 4,186 6,866 6,920

327,231 361,790 662,613 552,545


Notes to the Accounts (Continued)

2. TURNOVER AND OPERATING PROFIT (Continued)

OPERATING PROFITThree months ended Six months ended

30 June 30 June2001 2000 2001 2000


Cruise and cruise related activities 26,775 50,155 51,643 81,313

Charter hire 2,689 2,543 3,940 3,584

29,464 52,698 55,583 84,897

The Group’s turnover in its principal markets of North America, Asia Pacific and Europe is analysed as follows:

TURNOVERThree months ended Six months ended

30 June 30 June2001 2000 2001 2000


Asia Pacific 120,944 140,032 252,888 252,114North America (note) 180,498 198,918 359,511 269,881Europe 24,507 22,840 44,427 30,550Others 1,282 — 5,787 —

327,231 361,790 662,613 552,545

OPERATING PROFITThree months ended Six months ended

30 June 30 June2001 2000 2001 2000


Asia Pacific 25,631 21,959 53,663 46,686North America (note) 3,368 27,799 1,685 34,593Europe 396 2,940 208 3,618Others 69 — 27 —

29,464 52,698 55,583 84,897

Note: Substantially all this turnover and operating profit arises in the United States of America.

7 Interim Report


3. DEPRECIATION AND AMORTISATION

Depreciation and amortisation of the Group consists of the following:


2001 2000 2001 2000US$’000 US$’000 US$’000 US$’000


Depreciation of fixed assets 32,735 32,142 63,968 54,458Amortisation of software development costs 1,160 378 2,128 439Amortisation of goodwill 2,361 2,319 4,721 3,106Amortisation of trade names and trademarks 1,528 1,822 3,059 2,430

Total depreciation and amortisation 37,784 36,661 73,876 60,433

- relating to operating function 35,551 34,487 69,525 56,988- relating to selling, general and

administrative function 2,233 2,174 4,351 3,445

4. TAXATION


2001 2000 2001 2000US$’000 US$’000 US$’000 US$’000


Overseas taxation- Current taxation 245 360 466 579- Deferred taxation 2,640 1,957 — 3,851

2,885 2,317 466 4,430



5. EARNINGS/(LOSS) PER SHARE

Earnings/(loss) per share has been calculated as follows:


2001 2000 2001 2000US$’000 US$’000 US$’000 US$’000


BASICNet profit/(loss) 784 (940) 628 (1,544)

Average outstanding ordinaryshares in thousands 4,144,062 3,124,164 4,143,683 3,124,157

Basic earnings/(loss) per sharein US cents 0.02 (0.03) 0.02 (0.05)

FULLY DILUTEDNet profit/(loss) 784 (940) 628 (1,544)

Average outstanding ordinaryshares in thousands 4,144,062 3,124,164 4,143,683 3,124,157

Effect of dilutive ordinaryshares in thousands 16,479 68,202 26,590 68,791

Average outstanding ordinaryshares after assuming dilution

in thousands 4,160,541 3,192,366 4,170,273 3,192,948

Fully diluted earnings pershare in US cents 0.02 N/A 0.02 N/A

(i) The loss per share for the three months and six months ended 30 June 2000 have been restated to reflect thebonus issue of new ordinary share of US$0.10 each credited as fully paid up on the basis of four new ordinaryshares for every one existing ordinary share in August 2000.

(ii) Diluted loss per share for the three months and six months ended 30 June 2000 are not shown as the diluted lossper share is less than the basic loss per share.

6. TRADE RECEIVABLES

As at30 June 2001 31 December 2000

US$’000 US$’000unaudited audited

Trade receivables 21,803 22,300Less: Provisions (2,657) (2,380)

19,146 19,920

9 Interim Report


6. TRADE RECEIVABLES (Continued)

At 30 June 2001 and 31 December 2000, the ageing analysis of the trade receivables were as follows:



Current to 30 days 8,069 13,62531 days to 60 days 3,469 2,22361 days to 120 days 3,661 1,642121 days to 180 days 2,124 929181 days to 360 days 2,950 2,093Over 360 days 1,530 1,788

21,803 22,300

Credit terms generally range from payment in advance to 30 days credit terms.

7. TRADE CREDITORS

The ageing of trade creditors as at 30 June 2001 and 31 December 2000 were as follows:



Current to 60 days 53,693 68,99461 days to 120 days 3,333 3,138121 days to 180 days 1,671 3,381Over 180 days 328 579

59,025 76,092

Credit terms granted to the Group generally vary from no credit to 45 days credit.

8. LONG-TERM BANK LOANS

Long-term bank loans consist of the following:



US$521.6 million syndicated term loan 451,840 469,227US$600 million term loan (i) 450,000 600,000US$210 million DnB Loan Agreement 189,000 196,000US$623 million Fleet Loan 565,200 597,6001999 KfW Loan Agreement (ii) 150,000 96,790

Total liabilities 1,806,040 1,959,617Less: Current portion (113,573) (263,573)

Long-term portion 1,692,467 1,696,044



8. LONG-TERM BANK LOANS (Continued)

(i) Pursuant to the terms of an amendment agreement signed in April 2001, the Group repaid US$150 million of theUS$600 million 5-year term loan. This repayment was made from the proceeds of the disposal of m.v. Star Aquariusof US$75 million in the previous quarter with the balance from the proceeds of the convertible notes issued toResorts World Limited (“RWL”) and the share placement, both of which occurred in 2000.

(ii) This loan has been classified as a long-term bank loan since a permanent financing commitment to provide up toUS$225 million in loans has been obtained in May 2000 to refinance this loan.

9. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES

Golden Hope Limited (“GHL”), a company incorporated in the Isle of Man acting as trustee for the Golden Hope UnitTrust, a private unit trust whose beneficiaries include various trusts established for the benefit of Tan Sri Lim Goh Tong,and certain members of his family controls the Group.

Dato’ Lim Kok Thay, the Chairman, President and Chief Executive Officer of the Group, is a son of Tan Sri Lim GohTong.

Kien Huat Development Sdn Bhd (“Kien Huat”) is a company in which a brother of Dato’ Lim Kok Thay has a substantialinterest.

Genting Berhad (“GB”), a company in which Dato’ Lim Kok Thay has a deemed interest and which is listed on the KualaLumpur Stock Exchange, controls Resorts World Berhad (“RWB”), a company also listed on the Kuala Lumpur StockExchange which in turn controls RWL which is a substantial shareholder of the Company.

A description of certain material transactions between the Group and these companies is set out below:

(a) Kien Huat, together with its related companies, is involved in constructing a terminal building and renovating aship berth for the Group in Laem Chabang, Bangkok, Thailand. In addition, Kien Huat is also involved in carryingout improvements to the Group’s berthing facilities and other infrastructure facilities. Amounts charged to theGroup in respect of these services were US$0.1 million and US$0.2 million in the three months ended 30 June2001 and 2000 and US$0.2 million and US$0.5 million in the six months ended 30 June 2001 and 2000.

(b) GB and its related companies provide certain services to the Group, including treasury services, secretarialservices, certain information technology support services and other support services. The Group also purchasedair tickets from a subsidiary of RWB. Amounts charged to the Group in respect of these services were US$0.4million and US$0.3 million in the three months ended 30 June 2001 and 2000 and US$0.9 million and US$1.3million in the six months ended 30 June 2001 and 2000.

The Group provides certain services to assist a subsidiary of GB in promoting the Genting Highlands Resort andother resort related properties as well as in conducting business liaison activities internationally. The amountcharged to the subsidiary of GB was US$0.1 million in the three months and six months ended 30 June 2001.

Amounts outstanding at the end of each fiscal period in respect of the above transactions are included in the balancesheets within amounts due to related companies.

11 Interim Report


10. SHAREHOLDERS’ FUNDS

Six months ended 30 June 2001

ForeignAdditional currency Unamortised Cash flow

Share Share paid-in translation share option hedge RetainedCapital Premium capital adjustments expense reserve earnings Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

unaudited

At 1 January 2001 414,108 1,053,853 93,952 (25,577) (8,911) — 67,512 1,594,937

Exchange translationdifferences — — — (1,287) — — — (1,287)

Net profit for the period — — — — — — 628 628Gains on financial

instruments — — — — — 611 — 611Issue of ordinary

shares pursuant toStar CruisesEmployees ShareOption Scheme 299 534 — — — — — 833

Charged to profit andloss account — — — — 1,389 — — 1,389

At 30 June 2001 414,407 1,054,387 93,952 (26,864) (7,522) 611 68,140 1,597,111

Six months ended 30 June 2000

ForeignAdditional currency Unamortised Cash flow

Share Share paid-in translation share option hedge RetainedCapital Premium capital adjustments expense reserve earnings Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

audited

At 1 January 2000 62,467 675,823 89,376 (23,825) (4,892) — 111,512 910,461

Exchange translationdifferences — — — (927) — — — (927)

Net loss for the period — — — — — — (1,544) (1,544)Issue of ordinary

shares pursuant toStar CruisesEmployees ShareOption Scheme 18 227 — — — — — 245

Issuance of shareoption — — 1,535 — (1,535) — — —

Charged to profit andloss account — — — — 705 — — 705

At 30 June 2000 62,485 676,050 90,911 (24,752) (5,722) — 109,968 908,940

In June 2001, the Group paid a further approximately US$18 million to fund the new buildings programme in respect ofm.v. Norwegian Dawn (formerly known as m.v. SuperStar Scorpio) in addition to the payment of US$18 million made inFebruary this year. These payments were made from the proceeds of the convertible notes issued to RWL and shareplacement.



11. FINANCIAL INSTRUMENTS

The Group entered into several additional amortising interest rate swaps to effectively convert the interest rate onUS$148.5 million of the US$521.6 million term loan obtained to finance the construction of m.v. SuperStar Leo and m.v.SuperStar Virgo from a floating rate obligation to a fixed rate obligation in the three months ended 30 June 2001. As at30 June 2001, the Group has effectively converted the interest rate of aggregate US$268.5 million of this term loan toa fixed rate obligation, and the estimated fair market value of these interest rate swaps was approximately US$0.6million, which was favourable to the Group. The changes in the fair value of these interest rate swaps are included asa separate component of reserve.

12. CAPITAL COMMITMENTS AND CONTINGENCIES

(i) Capital expenditure

The Group had the following commitments as at 30 June 2001 and 31 December 2000:

As at30 June 31 December

2001 2000US$’000 US$’000

unaudited audited

Contracted but not provided for

- Cruise ships under construction 767,432 840,807- Cruise terminal under construction 6,500 9,547- Others 16,401 —

790,333 850,354

Authorised but not contracted for — —

(ii) Material Litigation and Contingencies

There were no material changes to the information disclosed in the Group’s annual report for the year ended 31December 2000.

Interim Dividend

The Directors do not recommend the declaration of any interim dividend in respect of the six months ended 30 June 2001(2000: Nil).

Financial Review

For the second quarter ended 30 June 2001, the Group recorded a net profit of US$0.8 million on revenue of US$327.2million, as compared to a net loss of US$0.9 million on revenue of US$361.8 million for the same quarter in 2000. Net profitfor the six months ended 30 June 2001 was US$0.6 million on revenue of US$662.6 million, compared to a net loss ofUS$1.5 million on revenue of US$552.5 million for the same period in 2000.

Results for six months ended 30 June 2001 as compared with proforma results for six months ended 30 June 2000

The results for the six months ended 30 June 2001 are not directly comparable to the six months ended 30 June 2000 as theGroup consolidated the results of NCL Holding ASA (“NCL”) which was acquired over the period December 1999 to February2000, with effect from 1 March 2000. On a proforma basis, including NCL’s results for January and February 2000, theGroup recorded a net profit of US$0.6 million compared to a proforma net profit of US$0.9 million in the same period in2000.

13 Interim Report

Financial Review (Continued)

Proforma results for the six months ended 30 June 2000 is as follows:

Six months ended 30 June2001 2000

US$’000 US$’000unaudited unaudited

Reported operating profit 55,583 84,897

Proforma adjustments

To consolidate 100% of NCL’s results from 1 January 2000 as ifthe acquisition of 100% of NCL had occurred on 1 January 2000 — 15,243

Proforma operating profit 55,583 100,140

Reported net profit/(loss) 628 (1,544)

Proforma adjustments

To consolidate 100% of NCL’s results from 1 January 2000 as ifthe acquisition of 100% of NCL had occurred on 1 January 2000 — 2,451

Proforma net profit 628 907

Operating data Actual Proforma

Passenger Cruise Days 3,459,543 3,541,756

Capacity Days 3,621,108 3,703,587

Occupancy as a percentage of total capacity 96% 96%

Note: The above unaudited proforma results for the six months ended 30 June 2000 have been prepared for illustrative purposes only andexclude any proforma adjustments for increased interest expense on borrowings to fund the acquisition.

In the second quarter this year, on a quarter on quarter comparison, the Group experienced a decrease in revenue of 9.6%from US$361.8 million to US$327.2 million. This is a direct result of a 5.3% decrease in capacity days and an overall 4.5 %decrease in yield. Total costs and expenses, excluding non-operating expenses decreased 3.7% from US$309.1 million toUS$297.8 million. Operating profit decreased 44.1% from US$52.7 million to US$29.5 million. Non-operating expensesdecreased 47.8% from US$49.4 million to US$25.8 million as a result of lower interest expenses, higher interest income andgains on foreign exchange contracts for the period.

Quarter on quarter, revenue for the Group’s Asia Pacific operations decreased 5.9% on the back of a 5.8% decrease incapacity days while yield was maintained at the same level. The decline in capacity days compared to the same period lastyear was due to the sale of m.v. Star Aquarius, m.v. MegaStar Capricorn and m.v. MegaStar Sagittarius. The reduction incapacity days was partially offset by the introduction of m.v. Norwegian Star 1 for the Group’s Taiwan operations in November2000. Ship operating cost per capacity day for the Group’s Asia Pacific operations reduced 0.6% in second quarter this year,resulting in a net first half increase of 5.5%. Selling, general and administrative cost per capacity day reduced 3.0% insecond quarter this year, bringing the first half movement to an overall increase of 5.5% over 2000.

Capacity days in second quarter for NCL decreased by 4.9% over the same period in 2000. The decrease in capacity dayswas mainly due to a more extensive dry dock schedule than in 2000, cancellation of a 7 day Caribbean cruise on s/s Norwayand the transfer of m.v. Norwegian Star 1 into the Star Cruises Asia Pacific operations. Net revenue yields for NorwegianCruise Line Limited (excluding Norwegian Capricorn Line’s operations in Australia), the combination of Norwegian CruiseLine and Orient Lines brands, declined 11.1% in second quarter, resulting in an overall 8.1% decline in the first half of 2001.Ship operating costs per capacity day rose by 6.3% in the second quarter and an overall increase of 11.1% in the first halfof this year compared to last year. Selling, general and administrative costs per capacity day increased by 6.5% in secondquarter, which results in an overall first half increase of 7.5% over 2000.

Foreign exchange and interest rate swaps

The Group entered into several additional amortising interest rate swaps to effectively convert the interest rate on US$148.5million of the US$521.6 million term loan obtained to finance the construction of m.v. SuperStar Leo and m.v. SuperStarVirgo from a floating rate obligation to a fixed rate obligation in the three months ended 30 June 2001. As at 30 June 2001,the Group has effectively converted the interest rate of aggregate US$268.5 million of this term loan to a fixed rate obligation,and the estimated fair market value of these interest rate swaps was approximately US$0.6 million, which was favourable tothe Group. The changes in the fair value of these interest rate swaps are included as a separate component of reserve.


Financial Review (Continued)

Liquidity and capital resources

In the six months ended 30 June 2001, operating activities generated cash inflow of US$194.3 million.

The Group made principal repayments of US$206.8 million in relation to its long-term bank loans in the six months ended 30June 2001, of which US$150 million was made from the proceeds of the disposal of m.v. Star Aquarius in 2001 of US$75million with the balance from the proceeds of the convertible notes issued to RWL and the share placement. In addition, theGroup drew down the remaining balance of US$53.2 million under the 1999 KfW loan to part finance the construction of theM/S Norwegian Sun.

In the six months ended 30 June 2001, the Group incurred approximately US$152.5 million of capital expenditure on fixedassets. Capital expenditure for the six months ended 30 June 2001 were primarily associated with the payments for shipsunder construction as well as for the refurbishment of the Group’s existing fleet. Approximately US$90.5 million was receivedmainly from the disposal of m.v. Star Aquarius and m.v. MegaStar Sagittarius during the period.

Prospects

Within the Asia Pacific market, the Group continues to expand its distribution network to market fly cruise packages to themajor cruise hubs in Asia Pacific. The Group’s plan moving forward is to continue to extend its marketing network throughappointment of more agents to increase cruising awareness in this region which is still relatively low compared with otherleisure options or cruising in the West. The Group also continues its program to expand its network into China, which itbelieves, will be a very significant emerging market. The Group has increased staffing in its China offices to cater for theincreasing number of fly cruise passengers from China.

On the American and European front, with the introduction of Freestyle Cruising on Norwegian Dream during secondquarter this year, the Group now has this innovative product on all of its ships except s/s Norway. To ensure the success ofthe Freestyle Cruising, the Group increased hotel staffing and significantly improve the food quality. Now that the product iswell established and well received, the Group is concentrating on achieving efficiencies to maintain a reasonable coststructure. Similarly, most of the marine operational initiatives have now been undertaken and the ships are undoubtedlyoperating to a higher standard than was the case prior to Star Cruises’ involvement. The Group is now focusing on achievingefficiencies in this area just as in the hotel area. It is expected that the ship operations costs per capacity day in third andfourth quarter this year to be in line with third and fourth quarter of last year and possibly slightly lower.

Other than as disclosed above, the Directors are not aware of any other material changes to the information in relation to theGroup’s performance and the material factors underlying its result and financial position published in the annual report forthe year ended 31 December 2000 and in the quarterly report for the three months ended 31 March 2001.

Directors’ Interests in Equity Securities

At 30 June 2001, the interests of the Directors in the securities of the Company and its associated corporations (within themeaning of the Securities (Disclosure of Interests) Ordinance (“SDI Ordinance”)), as recorded in the register maintained bythe Company under Section 29 of the SDI Ordinance or as notified to the Company and The Stock Exchange of Hong KongLimited pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows:

Ordinary shares of US$0.10 each in the Company

Number of ordinary sharesPersonal Family Corporate Otherinterests interests interests interests Total

(Note) (Note) (Note) (Note)

Dato’ Lim Kok Thay 3,115,000 23,247,990(1) 23,247,990(1) 3,647,723,812(2) 3,674,086,802(1)

Mr. Chong Chee Tut 252,000 — — — 252,000Mr.William Ng Ko Seng 87,500 — — — 87,500Mr. David Colin Sinclair Veitch 275,000 — — — 275,000

Notes:

1. Deemed interest under family interest and corporate interest refers to the same block of 23,247,990 ordinary shares held by GoldsfineInvestments Limited (“Goldsfine”). Each of Dato’ Lim Kok Thay and his wife, Datin Wong Hon Yee holds 50 per cent. of the issuedshare capital of Goldsfine. This same block of 23,247,990 ordinary shares held by Goldsfine has not been duplicated in arriving at thetotal interest of Dato’ Lim.

2. Deemed interests through Resorts World Limited, Golden Hope Limited and Joondalup Limited.

15 Interim Report

Directors’ Interests in Equity Securities (Continued)

Ordinary shares of US$0.10 each in the Company (Continued)

Interest arising from options granted under The Star Cruises Employees Share Option Scheme, details of the principalterms of the scheme were given in the Company’s latest published annual report for the year ended 31 December 2000.

Number of options Number of shares Number ofoutstanding at acquired and exercise options Exercise1/1/2001 and of options during outstanding price per

Name of Director 1/4/2001 the interim period at 30/6/2001 Date granted share Exercisable Period

Dato’ Lim Kok Thay 5,000,000 — 5,000,000 25/5/1998 US$0.2712 21/8/1999 - 20/8/20053,625,000 — 3,625,000 24/3/1999 US$0.2712 24/3/2002 - 23/3/20091,375,000 — 1,375,000 24/3/1999 US$0.455 24/3/2002 - 23/3/20091,000,000 — 1,000,000 23/10/2000 US$0.2712 23/10/2003 - 22/8/20103,625,000 — 3,625,000 16/11/2000 US$0.2712 24/3/2002 - 23/3/20091,375,000 — 1,375,000 16/11/2000 US$0.455 24/3/2002 - 23/3/2009

250,000 — 250,000 16/11/2000 US$0.2712 23/10/2003 - 22/8/2010

16,250,000

Mr. Chong Chee Tut 185,000 (37,000) 148,000 25/5/1998 US$0.2712 20/12/2000 - 19/12/2005100,000 — 100,000 25/5/1998 US$0.455 23/6/2000 - 22/6/2007425,000 — 425,000 24/3/1999 US$0.2712 24/3/2002 - 23/3/200975,000 — 75,000 24/3/1999 US$0.455 24/3/2002 - 23/3/2009

480,000 — 480,000 23/10/2000 US$0.2712 23/10/2003 - 22/8/201020,000 — 20,000 23/10/2000 US$0.455 23/10/2003 - 22/8/2010

1,248,000

Mr. William Ng Ko Seng 187,500 — 187,500 25/5/1998 US$0.2712 21/8/2000 - 20/8/200525,000 — 25,000 24/3/1999 US$0.2712 24/3/2002 - 23/3/2009

100,000 — 100,000 24/3/1999 US$0.455 24/3/2002 - 23/3/2009380,000 — 380,000 23/10/2000 US$0.2712 23/10/2003 - 22/8/201020,000 — 20,000 23/10/2000 US$0.455 23/10/2003 - 22/8/2010

712,500

Mr. David Colin Sinclair Veitch 1,000,000 — 1,000,000 7/1/2000 US$0.455 7/1/2003 - 6/1/2010

Certain Directors held qualifying shares in certain subsidiaries of the Company in trust for the Company and other subsidiaries.

Substantial Shareholders

At 30 June 2001, the register of substantial shareholders maintained by the Company under section 16(1) of the SDI Ordinanceshows that the Company had been notified of the following substantial shareholders’ interests, being 10% or more of the Company’sissued share capital. These interests are in addition to those disclosed above in respect of the Directors and chief executive.

Number of Percentage ofName of shareholder (Notes) ordinary shares shareholding

Parkview Management Sdn Bhd (1 and 8) 1,486,886,993 35.9Kien Huat Realty Sdn Bhd (2 and 8) 1,486,886,993 35.9Genting Berhad (3 and 8) 1,486,886,993 35.9Resorts World Bhd (4 and 8) 1,486,886,993 35.9Sierra Springs Sdn Bhd (5 and 8) 1,486,886,993 35.9Resorts World Limited (5 and 8) 1,486,886,993 35.9GZ Trust Corporation (6 and 9) 2,160,836,819 52.1Golden Hope Limited (7 and 9) 2,160,836,819 52.1Datin Wong Hon Yee (10) 3,674,086,802 88.7


Substantial Shareholders (Continued)

Notes:

1. Parkview Management Sdn Bhd is a trustee of a discretionary trust (“Discretionary Trust”), the beneficiaries of which include certainmembers of Tan Sri Lim Goh Tong’s family (“Lim Family”).

2. Kien Huat Realty Sdn Bhd (“KHR”) is a private company of which the Discretionary Trust, through Info-Text Sdn Bhd and Dataline SdnBhd controls more than one third of the voting power.

3. Genting Berhad is a company listed on the Kuala Lumpur Stock Exchange (“KLSE”) in Malaysia of which KHR controls more than onethird of the voting power.

4. Resorts World Bhd is a company listed on KLSE and is a subsidiary of Genting Berhad.

5. Sierra Springs Sdn Bhd and Resorts World Limited are companies which are wholly-owned subsidiaries of Resorts World Bhd.

6. GZ Trust Corporation is the trustee of various discretionary trusts established for the benefit of certain members of the Lim Family.These discretionary trusts are unit-holders of Golden Hope Unit Trust (“GHUT”), a private unit trust.

7. Golden Hope Limited is the trustee of GHUT.

8. The interests of persons named in Notes 1 to 5 in 1,486,886,993 ordinary shares relates to the same block of shares.

9. The interests of persons named in Notes 6 and 7 in 2,160,836,819 ordinary shares relates to the same block of shares.

10. Datin Wong Hon Yee as the wife of Dato’ Lim Kok Thay, has a family interest in the same block of 3,674,086,802 ordinary shares inwhich Dato’ Lim has a deemed interest. Datin Wong also has a corporate interest in 23,247,990 ordinary shares held by Goldsfine byholding 50 per cent. of the issued share capital of Goldsfine.

Practice Note 19 to the Listing Rules

The Company is a party to three loan agreements for an aggregate amount of approximately US$1.8 billion with termsranging from five to sixteen years. These agreements require the Lim Family to retain a direct or indirect ownership interestof 51 per cent or more in the Company during the term of the loans. A further short-term revolving credit of US$50 millionwhich remains available to the Company requires the Company be directly or indirectly majority-owned by Golden HopeLimited.

Purchase, Sale or Redemption of Shares

Neither the Company nor any of its subsidiaries has purchased, redeemed or sold any of the Company’s shares during thesix months ended 30 June 2001, save for the issue of 2,987,500 new ordinary shares of US$0.10 each at an aggregateprice of US$832,817 pursuant to the exercise of options granted under The Star Cruises Employees Share Option Scheme.

Corporate Governance

In compliance with the Code of Best Practice stipulated in Appendix 14 of the Rules Governing the Listing of Securities onThe Stock Exchange of Hong Kong Limited (the “Code of Best Practice”), the Company has established an Audit Committeewith written terms of reference. The Audit Committee comprises the three Independent Non-executive Directors of theCompany, namely Mr. Alan Howard Smith, J.P., Mr. Tan Boon Seng and Mr. Lim Lay Leng. This Unaudited Interim Report hasbeen reviewed by the Audit Committee.

None of the Directors is aware of information that would reasonably indicate that the Company was not in compliance withthe Code of Best Practice at any time during the six months ended 30 June 2001 except that Independent Non-executiveDirectors were not appointed for a specific term but are subject to retirement by rotation and re-election at the annualgeneral meeting of the Company in accordance with the Bye-laws of the Company.

On behalf of the Board

Dato’ Lim Kok ThayChairman, President and Chief Executive Officer

Hong Kong, 27 August 2001

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