NCLH posts record revenue and earnings

2018-11-18T15:03:52+00:00 November 18th, 2018|Finance|

Norwegian Cruise Line Holdings generated GAAP net income of $470.4 mill or EPS of $2.11 for the third quarter of this year, compared to $400.7 mill or $1.74 in 3Q17. 

Adjusted net income was $506.4 mill or adjusted EPS of $2.27 for 3Q18, compared to $427 mill or $1.86 in the same period of 2017. The adjusted EPS outperformed guidance by $0.07.

The company said it expected to generate record earnings in full year 2018 and has increased its outlook above the high-end of its previous guidance range. Adjusted EPS is now expected to be around $4.85, which is inclusive of the previously announced impact from itinerary optimisation initiatives which will benefit future periods.  

“Our three brands fully benefited from strong demand for peak summer season sailings, with particular strength in premium-priced itineraries in Alaska and Europe, resulting in the highest quarterly revenue and earnings in our history,” said Mark Kempa, Executive Vice President and CFO. “As 2018 winds down, our earnings outlook improves as we increase our full year adjusted EPS above the high-end of our previous guidance range.”

Revenue increased 12.5% to $1.9 bill, compared to $1.7 bill in 3Q17. Net Revenue increased 11.8% to $1.4 bill, compared to $1.3 bill in 3Q17. 

These improvements were primarily attributed to strong organic pricing growth across all core markets along with an increase in capacity days, due to the addition of ‘Norwegian Bliss’ to the fleet in 2Q18. Gross yield increased 4.5% and net yield increased 4% on a constant currency basis and 3.9% on an as reported basis.

Total cruise operating expense increased 10.8% in 2018, compared to 2017 primarily due to the increase in capacity days. Gross cruise costs per capacity day increased 4%, due to higher marketing, general and administrative expenses. Adjusted net cruise cost, excluding fuel per capacity day, increased 2% on a constant currency basis and 2.1% on an as reported basis.

“The robust booking environment for cruise vacations is alive and well as evidenced by our stellar booked position for 2019, which continues to exceed this year’s record levels, with booking momentum accelerating for sailings throughout 2019 and extending into 2020,” said Frank Del Rio, NCLH President and CEO. “We are well-positioned to achieve the three-year double-digit adjusted EPS CAGR, net leverage and adjusted ROIC targets provided at our 2018 investor day, while at the same time returning meaningful capital to shareholders, despite rising fuel prices and fluctuations in foreign exchange rates.”

In August, Oceania Cruises announced OceaniaNEXT, a series of initiatives to bring enhancements designed to elevate every facet of the guest experience across Oceania Cruises’ fleet.

The first initiative to be undertaken is the $100 mill refurbishment of the line’s four 684-pax ‘Regatta’ class ships. Each ship will emerge from the re-inspiration process with 342 brand new designer suites and staterooms, as well as new décor in the restaurants, lounges and bars, inspired by the line’s 450 ports of call. 

In addition, the cruise line unveiled a suite of new enhancements as part of OceaniaNEXT, which include a new generation of owner’s suites furnished exclusively with Ralph Lauren Home on ‘Marina’ and ‘Riviera’, the use of shipboard credit prior to departure, a new pre-cruise savings programme and a luggage valet programme.