Norwegian Cruise Line Holdings (NCLH) has reported record revenue and earnings for the fourth quarter of 2018 and the full year.
For the full year, GAAP net income was $954.8 mill or EPS of $4.25, compared to $759.9 mill or $3.31 in 2017.
NCLH generated adjusted net income of $1.1 bill or adjusted EPS of $4.92, compared to $907.7 mill or $3.96 in the previous year.
Strong growth in 2018, including an increase in GAAP EPS of 28.4% and adjusted EPS of 24.2%, follows a strong 2017 growth of 19.1% and 16.1%, respectively.
Revenue increased 12.2% to $6.1 bill compared to $5.4 bill in 2017. This increase was primarily attributed to an 8.5% increase in capacity days, due to the delivery of ‘Norwegian Bliss’ in April, 2018 and ‘Norwegian Joy’ in April, 2017, as well as strong organic pricing growth across all core markets.
Gross yield increased 3.4%. net yield increased 3.5% on a constant currency basis and 3.7% on an as reported basis.
Cruise operating expense increased 10.2% in 2018 compared to 2017, primarily due to an increase in capacity days. Gross cruise costs per capacity day increased 2.7%. Adjusted net cruise cost excluding fuel per capacity day increased 2.6% on a constant currency basis and 2.9% on an as reported basis.
Fuel price per tonne, net of hedges, increased to $483 from $465 in 2017. The company reported fuel expense of $392.7 mill for the period.
GAAP net income for 4Q18 was $154.6 mill or EPS of $0.70, compared to $98.8 mill or $0.43 in 4Q17. The company generated adjusted net income of $188.8 mill or adjusted EPS of $0.85, compared to $156.8 mill or $0.68 in same quarter of 2017.
Revenue increased 10.5% to $1.4 bill, compared to $1.2 bill in 2017. These increases were primarily attributed to the addition of ‘Norwegian Bliss’ to the fleet, along with strong organic ticket pricing growth across all core markets and robust on board spending. Gross yield increased 3%. Net yield increased 4.7% on a constant currency basis and 4.2% on an as reported basis.
Total cruise operating expense increased 8.5% in 2018, compared to 2017, primarily due to an increase in capacity days. Gross cruise costs per capacity cay increased 1.8%. Adjusted net cruise cost excluding fuel per capacity day increased 3.6% on a constant currency basis and 3.4% on an as reported basis.
Fuel price per tonne, net of hedges, increased to $496 from $460 in 4Q17. The company reported fuel expense of $104.4 mill in the period.
“2018 marked a key inflection point for the company, as we have made significant progress towards achieving our full speed ahead 2020 Targets. Our cash generation continues to accelerate and we remain keenly focused on returning meaningful capital to our shareholders, already returning approximately one-third of our three-year targeted capital distribution,” said Mark Kempa, NCLH executive vice president and CFO.
“We are confident in our outlook for 2019 and beyond, and have built upon our foundation for measured capacity growth by enhancing our growth profile through 2027, with announced orders for all three of our award-winning brands, now totalling 11 vessels, enabling us to expand our presence both globally and domestically and further diversify our product offerings to continue driving outsized shareholder returns,” he added.
“The team at Norwegian Cruise Line Holdings delivered a breakout year in 2018, once again generating industry-leading record financial performance. Strong global demand for our portfolio of brands, the successful, record-breaking introduction of ‘Norwegian Bliss’ and the flawless execution of our demand creation strategies, drove our fifth consecutive year of double-digit earnings per share growth,” said Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings L.
“Building on this momentum, we entered 2019 in the best booked position in our company’s history, with pricing above prior year’s record levels. The strong start to this year’s WAVE season, coupled with our moderate in-year capacity growth and our solid booked position across our three brands, has us well-positioned to continue driving price throughout the year and into 2020, where we will also benefit from the first full year of sailings from ‘Norwegian Encore’ and the addition of Regent’s ‘Seven Seas Splendor’,” he said.
