Norwegian Cruise Line Holdings results impacted by Hurricane ‘Dorian’

2019-11-15T21:29:30+00:00 November 15th, 2019|Finance|

For the third quarter of this year, Norwegian Cruise Line Holdings (NCLH) generated GAAP net income of $450.6 mill or EPS of $2.09, compared to $470.4 mill or $2.11 in 3Q18.

Adjusted net income was $481.5 mill or adjusted EPS of $2.23, compared to $506.4 mill or $2.27 in the same period of 2018.

These results include a $0.06 per share impact from voyage cancellations, itinerary modifications and relief efforts related to Hurricane ‘Dorian’.

Total revenue increased 3% to $1.9 bill on a decrease in capacity days of 1.8%. Gross yield increased 4.8%, while net yield increased 3.9% on a constant currency basis, outperforming August guidance by 215 basis points.

Full year adjusted EPS is in line with the midpoint of August guidance and is expected to be about $5.05, inclusive of a $0.15 per share adverse impact from Hurricane ‘Dorian’, NCLH said.

Strong demand in the company’s core markets more than offset the around 25 basis point impact on full year net yield growth from the hurricane, leading NCLH to raise its outlook for net yield growth to about 3% on a constant currency basis.

NCLH’s environmental stewardship efforts to reduce the use of single-use plastics took another step forward when Norwegian Cruise Line announced it will become the first major cruise line to eliminate all single-use plastic water bottles, which is expected to eliminate over 6 mill plastic bottles per year.

“The underlying fundamentals of our business remain as strong as ever, allowing us to post another solid quarter of financial results despite the impacts from Hurricane ‘Dorian’. The top line exceeded expectations and we recorded the highest quarterly revenue in our history,” said Frank Del Rio, NCLH president and CEO.

“We are on track to deliver yet another record-breaking year in 2019, and the positive momentum for our global brands is carrying over into 2020, as demand, occupancy and pricing continue to outpace 2019 record levels, buoyed by the addition of ‘Norwegian Encore’ and ‘Seven Seas Splendor’.”

“We accelerated returns to shareholders to take advantage of current valuations and executed $150 mill in share re-purchases in the quarter, bringing our total capital returns since January 2018 to $1 bill,” said Mark Kempa, NCLH’s executive vice president and CFO.

“The combination of the continued robust demand environment and the building excitement for the launches of ‘Norwegian Encore’ and ‘Seven Seas Splendor’ are setting up 2020 to be another milestone year.”

Future capital commitments consist of contracted commitments, including ship construction contracts, and future expected capital expenditures necessary for operations as well as the ship revitalisation projects and other strategic investments.

As of 30th September, 2019, anticipated capital expenditures were $1 bill for the remainder of 2019, $1.2 bill and $0.8 bill for the years ending 31st December, 2020 and 2021, respectively.

NCLH has export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.7 bill for the remainder of this year, $0.5 bill and $0.2 bill for the years ended 31st December, 2020 and 2021, respectively.

In October, the company announced organisational changes at the NCL brand. They included the planned departure of Andy Stuart, NCL President and CEO, following the launch of ‘Norwegian Encore’ and the appointment of Harry Sommer, current NCL President, International, as Stuart’s successor.

Stuart will step down from his role on 31st December, 2019 and remain with the company as Senior Advisor through 31st March, 2020 to ensure a smooth transition.