Norwegian Cruise Line Holdings suffered a GAAP net loss of $717.8 mill or EPS of a negative $1.94 for the second quarter of this year, compared to a net loss of $715.2 mill or EPS of minus $2.99 in the same period of 2020.
Adjusted net loss was $714.7 mill or adjusted EPS minus $1.93 in 2Q21, which included $3.1 mill of net adjustments. This compares to a $666.4 mill loss and a negative $2.78, respectively, in 2Q20.
Revenue decreased to $4.4 mill, compared to $16.9 mill in 2Q20, as voyages were again suspended for the entire quarter.
However, the total cruise operating expense decreased 17.2% in the second quarter compared to 2Q20. This year, cruise operating expenses were primarily related to crew costs, including salaries, food and other travel costs, fuel, and other ongoing costs such as insurance and ship maintenance.
“Last week we reached a historic milestone in our Great Cruise Comeback with the successful commencement of our relaunch with the first ship in our fleet, ‘Norwegian Jade’, sailing the Greek Isles. We will mark our first cruise in the US in over 500 days as ‘Norwegian Encore’ sets sail from Seattle to Alaska,” said Frank Del Rio, NCLH’s President and CEO (pictured).
“As we recommence operations, we are putting health and safety at the forefront with our robust, science-backed SailSAFETM health and safety programme, including our 100% vaccination policy, which applies across all voyages on our three brands. We are ready and eager to welcome guests back on board and continue to see incredible strength in our booking trends for future cruises. Our team is working tirelessly to execute on our plan to return our full fleet to operation by April, 2022 to capitalise on this unparalleled pent-up demand,” he said.
NCLH also announced its phased relaunch plans for all 28 ships across its three brands, which began with ‘Norwegian Jade’ on 25th July, 2021 and continues through 1st April 2022.
The first cruise to commence in the US was scheduled on 7th August, 2021 with ‘Norwegian Encore’ sailing to Alaska from Seattle. The company said that it expected to have about 40% of its fleet capacity operating by the end of the third quarter 2021 and around 75% by the end of this year with the full fleet expected to be back in operation by 1st April 2022.
Future bookings were reported to be strong, despite reduced sales and marketing investments and a travel agency industry that has not been at full strength since the start of the pandemic.
NCLH said that it was experiencing robust future demand across all brands with the overall cumulative booked position for full year 2022 meaningfully ahead of 2019’s record levels at higher pricing even when including the dilutive impact of future cruise credits (FCCs).
Its advance ticket sales were $1.4 bill, including the long-term portion, which includes around $800 mill of FCCs as of 30th June, 2021.
The company’s monthly average cash burn for 2Q21 was around $200 mill, higher than previous guidance of about $190 mill and above the previous quarter, as it prepared for a return to service this summer.
Looking ahead, NCLH said that it expected third quarter 2021 monthly average cash burn to increase to around $285 mill driven by the continued phased relaunch of additional vessels. This cash burn rate does not include expected cash inflows from new and existing bookings.
“We are focused on the flawless execution of our return to service plan, including the phased relaunch of all 28 of our vessels by April,2022, which is the first step on our road to recovery,” said Mark Kempa, NCLH’s Executive Vice President and CFO. “Recognising that the global public health environment remains fluid, we continue to focus on controlling costs, balancing our cash needs and enhancing our liquidity position to maintain financial flexibility.”