Norwegian Cruise Line Holdings (NCLH), together with NCL Corp, generated record second quarter 2024 total revenue of $2.4 bill, an 8% increase, compared to the same period in 2023 on a 4% capacity growth.
GAAP net income was $163.4 mill, or EPS of $0.35.
The performance was driven by strong revenue growth and continued focus on cost reductions and efficiencies.
Adjusted EBITDA grew 14% to $587.7 mill, compared to $514.8 mill for 2Q23 and above the guidance of $555 mill. Adjusted EPS grew 33% to $0.40, which compares to $0.30 in 2Q23, exceeding the guidance of $0.32.
NCLH said that it sustained focus on margin enhancement drove another quarter of improvement in operating costs. Gross Cruise Costs per Capacity Day was around $315 for the quarter.
Adjusted Net Cruise Costs, excluding Fuel per Capacity Day, was about $163 on an as reported and constant currency basis, better than guidance, and flat year-on-year when excluding the expected circa $9 impact of the incremental drydockings and the related reduction in capacity days.
Occupancy was 105.9% for the quarter, slightly above guidance, and total revenue per Passenger Cruise Day increased around 2%, compared to 2Q23.
Gross margin per Capacity Day was up 7% versus 2023 on an as reported and constant currency basis. Net yield growth beat guidance by 200 basis points, increasing over prior year by about 6.3% on an as reported and constant currency basis, due to strong close-in demand and on-board revenue performance.
Total debt was $13.4 bill. Net Leverage was 5.9x for the 12-months ending 30th June, 2024, achieving year-end goal of reducing Net Leverage by about 1.5x from 31st December, 2023 six months early.
NCLH announced ‘Charting the Course 2026’ targets at the May investor day, detailing a new vision to ‘Vacation Better. Experience More.’ with robust financial targets.
As for the outlook, 2024 full year net yield guidance on a constant currency basis increased 100 basis points from the prior guidance to around 8.2% from 7.2%.
Full year adjusted EBITDA guidance increased $50 mill from the previous guidance to around $2.35 bill from $2.30 bill.
Adjusted net cruise costs, excluding Fuel per Capacity Day, guidance remained unchanged at flat to previous year, excluding the impact of drydockings.
Full year adjusted net income guidance increased $60 mill from prior guidance to about $790 mill from $730 mill, while adjusted EPS guidance increased over 8%, or $0.11 to $1.53 from $1.42.
NCLH also claimed to be on track to achieve double-digit adjusted ROIC by the year-end.
“2024 continues to be an exceptional year in terms of our financial performance, as evidenced by our strong second quarter results which exceeded guidance across the board.
“As we raise our full-year guidance a third time, we expect our adjusted EPS to grow about 120%, compared to 2023, driven mainly by our ability to capitalise on the robust market demand and ensuring our guests are vacationing better and experiencing more across our brands,” said Harry Sommer, NCLH’s President and CEO (pictured).
“The momentum we are garnering from strong yield growth, disciplined cost management and the initiatives that comprise our ‘Charting the Course’ strategy further bolsters our confidence in achieving our previously announced 2026 financial and sustainability targets,” he added.
NCLH said that it continued to experience strong consumer demand, as the majority of new bookings were geared to 2025 sailings. As a result, the company remained at the upper range of its optimal booked position on a 12-month forward basis.
Full year 2024 occupancy is expected to average 105.2%, slightly above previous guidance.
The company’s advance ticket sales balance, including the long-term portion, ended 2Q24 at an all-time record high of $3.9 bill, about 11% higher than the same period of 2023.
NCLH also said that it was committed to prioritising efforts to optimise its balance sheet and reduce leverage. As of 30th June, 2024, the company had total debt of $13.4 bill and net debt of $12.8 bill.
At quarter-end, liquidity was $2.7 bill. This consisted of around $594.1 mill of cash and cash equivalents, $1.2 bill of availability under our undrawn revolving loan facility, a $650 mill undrawn backstop commitment, plus other commitments.
“We enter the second half of 2024 with strong momentum, exceeding our guidance metrics in each quarter of 2024 on the back of strong execution.
“We continue to see robust demand heading into the back half of the year and are committed to improving efficiencies, reducing costs, and restoring our margins in a strategic and disciplined manner.
“Given our strong progress to date and current demand expectations, we are raising our 2024 full-year guidance for a third time this year for key metrics resulting in expected Adjusted EPS growth of 120% versus 2023, while keeping our cost guidance for the year unchanged at flat to prior year,” said Mark Kempa, NCLH’s Executive Vice President and CFO.
“Additionally, we made significant advances in reducing net leverage and de-risking our balance sheet during the first half of 2024. We have already accomplished our year-end goal of reducing net leverage by a full turn and a half versus year-end 2023, ending the quarter at 5.9x.
“We remain confident that our strong liquidity position, ongoing cash generation, and favourable growth prospects will enable us to continue to de-risk our balance sheet further bolstering our path to achieving the 2026 ‘Charting the Course’ financial targets laid out at our recent investor day,” he concluded.
Non-newbuilding capital expenditures for 2Q24 were $167 mill. Anticipated non-newbuilding capital expenditures for the full year are expected to be around $575 mill, including about $141 mill in the third quarter.
Newbuilding-related capital expenditures, net of export credit financing, are expected to be around $0.3 bill, $0.6 bill and $0.8 bill for the full years ending 31st December, 2024, 2025 and 2026, respectively.
Net newbuilding-related capital expenditures for 2Q24 were around $60 mill and are expected to be about $119 mill for 3Q24.
