Norwegian Cruise Line Holdings (NCLH) GAAP net income was $400.7 mill (EPS $1.74) for the third quarter of this year, compared to $342.4 mill ($1.50) in 3Q16.
The Company generated adjusted net Income of $427 mill (Adjusted EPS $1.86), compared to $369.3 mill ($1.62) in 3Q16.
For 3Q17, revenue increased 11.2% to $1.7 bill, compared to $1.5 bill in 2016. This rise was primarily attributed to a 9.1% increase in capacity days, mainly due to the delivery of ‘Norwegian Joy’, which entered service in late June, along with an increase in net yield, due to strength in ticket pricing and higher on board and other revenue, the company said.
Gross yield increased 2%, while adjusted net yield improved 3% on a constant currency basis and 3.1% on an as reported basis.
Gross cruise cost increased 8.4% during the quarter, compared to 3Q16, due to an increase in total cruise operating expense and marketing, general and administrative expenses, which was primarily attributable to the increase in capacity days. Gross cruise costs per capacity day decreased 0.6%.
Adjusted net cruise cost, excluding fuel per capacity day, increased 0.5% on a constant currency basis and 0.6% on an as reported basis, primarily due to an increase in marketing, general and administrative expenses offset by a decrease in cruise operating expenses.
Fuel price per tonne, net of hedges, decreased 4.8% to $476 from $500 in the previous year. NCLH reported fuel expense of $91.2 mill in the period.
Interest expense, net increased to $66.3 mill in 2017 from $60.7 mill in 2016. Interest expense for 2017 reflects an increase in average debt balances outstanding mainly associated with the delivery of new ships and newbuild instalments, as well as higher interest rates, due to an increase in LIBOR.
“Strong operational performance across our core markets, bolstered by strength in European itineraries, where pricing has now exceeded the previous high watermark of 2015, drove third quarter revenue and yield growth well ahead of expectations, despite the disruptions caused by weather-related events during the quarter,” said Frank Del Rio, NCLH president and CEO. “Over the last several weeks, we have seen consumer demand continue to accelerate for Caribbean sailings and booking volumes have now reached pre-hurricane levels.
“Our ships, crew and shoreside personnel have been actively engaged in assisting impacted destinations by evacuating stranded families and delivering much-needed supplies. In addition, our company has committed to providing long-term financial aid to rebuild critical infrastructure through our ‘Hope Starts Here’ hurricane relief programme,” he said.
Looking ahead, Wendy Beck, executive vice president and CFO said; “Our booked position for full year 2018 remains well ahead in both load and price compared to prior year across all three of our brands, despite booking headwinds caused by weather-related disruptions in the Caribbean.
“We continue to focus on further strengthening our balance sheet as evidenced by the success of our recent refinancing transaction. We are now within our targeted leverage range of three to four times with further meaningful deleveraging expected in 2018 and beyond,” she said.
In August, NCLH revealed features and amenities for ‘Norwegian Bliss’, the line’s 16th ship, which has been designed for the ultimate Alaska cruising experience and begins sailing in June, 2018.
‘Norwegian Bliss’ will boast many firsts at sea features, including the largest competitive race track at sea and an open-air laser tag course.
