Norwegian Cruise Line cuts fourth-quarter loss, returns to annual profit

By PortalPortuario Editorial Staff


Norwegian Cruise Line Holdings Its loss narrowed in the fourth quarter and returned to full-year profit for the first time since the pandemic. Shares rose 9% before the market opened.

Highlights include total revenues of $8.5 billion, up 32% compared to the same period in 2019, with Gap net income of $166.2 million, returning to profitability across the board for the first time since 2019.

The company’s ongoing margin improvement initiatives have led to improvement in operating costs. Gross cruising costs per day at capacity for the year were approximately $301.

Meanwhile, capacity per day excluding fuel costs was about $154, down 21% from the same period in 2022. This represents four consecutive quarters of year-over-year improvement in this metric.

Occupancy for the year was 102.9%, in line with guidance of 102.6%, and total revenue per passenger cruise day increased approximately 17% or 18% in constant currency compared to the same period in 2019.

Additionally, the company indicated that it is seeing exceptional demand for the Norwegian Cruise Line brand, with bookings and prices at higher levels through the four quarters of 2024 than in 2023. Oceania Cruises and Regent Seven Seas Cruises also continue to see strong demand across all geographies. , excluding re-planned itineraries due to cancellations in the Middle East and the Red Sea.

outlook 2024

Net yields are expected to grow about 5.5% on a reported basis over 2023 and about 5.4% in constant currency.

In 2024, adjusted net cruise costs, excluding fuel, per capacity day are expected to be $159, an increase of 3.4% in constant currency, which includes the impact of approximately 325 basis points from an increase in dry dock days and related costs in the year .

About this, harry summer, Chairman and CEO of Norwegian Cruise Line Holdings Ltd., noted that “Norwegian Cruise Line Holding experienced a significant year of growth and achievement in 2023. We successfully took delivery of three new ships, one for each of our brands, the most in a single year in our 57-year history. Represents over-delivery.” company. “This important milestone reflects our dedication to innovation and commitment to providing our guests with exceptional vacation experiences.”

“Looking ahead, we are determined to capitalize on our recent achievements and build on the positive momentum and strong demand for cruises, which has resulted in our booking position being at record highs in a year in both terms and pricing. “Our team looks forward to showcasing our world-class fleet, delivering exceptional experiences, and exceeding the expectations of the guests we will welcome in 2024 and beyond,” Sommer said.

The company continues to experience healthy consumer demand and is on track for record bookings and pricing, reflecting some of the best booking weeks in company history, beginning with Black Friday and Cyber ​​Monday.

Additionally, onboard revenue per passenger cruise day remained strong up 20% in the quarter compared to 2019, with broad-based strength across all revenue streams. The balance of the company’s advance ticket sales, including the long-term portion, ended 2023 with a year-end record of $3.2 billion, up nearly 56% from the end of 2019.

As a result of Israel and the ongoing conflict in the Red Sea, the company canceled and redirected all calls to Israel during the fourth quarter of 2023.

In that sense, in line with guidance, occupancy for the fourth quarter of 2023 was 99.2% and occupancy for the full year was 102.9%. Additionally, all calls to Israel and the Red Sea have been canceled and redirected throughout 2024.

Before the conflict, approximately 7% of capacity in the fourth quarter of 2023 and 4% of capacity for full year 2024 were expected to visit the Middle East, primarily on the Oceania Cruises and Regent Seven Seas Cruises brands.

It is noteworthy that before the recent cancellation, about 1% of the 2024 capacity was expected to flow into the Red Sea.

Value growth also remained strong in the fourth quarter, with total revenue per passenger cruise day increasing nearly 21% compared to 2019, driven by a 17% increase in capacity.

Total revenue increased nearly 34% in the fourth quarter compared to 2019. Gross margin per day in the quarter was approximately $79.

For full year 2024, the company expects strong net performance growth of approximately 5.4% in constant currency compared to 2023. This growth is driven by exceptional demand from Norwegian Cruise Line, with Oceania Cruises and Regent Seven Seas Cruises also experiencing strong demand. In all geographical areas, except for redistributed voyages due to conflicts in the Middle East and the Red Sea.

Liquidity and financial position

The company is committed to prioritizing efforts to optimize its balance sheet and reduce leverage. As of December 31, 2023, the company had total debt of $14.1 billion and total net debt of $13.7 billion and the company expects to improve its net leverage. Norwegian repays $1.9 billion of debt in 2023, including full repayment of an $875 million revolving loan facility.

for its part, Mark A. Kempa, Executive Vice President and Chief Financial Officer of Norwegian Cruise Line Holdings Ltd., indicated that “Throughout the year, we successfully implemented measures to resize our cost base. “Notably, fourth quarter 2023 adjusted net cruise cost per day capacity excluding fuel improved for our fourth consecutive quarter, resulting in a substantial 21% reduction in 2023 compared to 2022.”

“In addition, we have made significant progress in reducing leverage and de-risking our balance sheet through 2023. We repaid $1.9 billion of debt during the year, including the full repayment of our $875 million revolving credit facility Was involved, and we are confident of that.” “Our solid liquidity position, our continued cash generation and our favorable growth prospects will allow us to significantly reduce leverage during 2024,” he explained.

full year results 2023

Gap had net income of $166.2 million or EPS of $0.39, compared to a net loss last year. The company reported adjusted net income of $298.0 million or adjusted EPS of $0.70 for the year.

Additionally, compared to 2019, total revenue per passenger cruise day increased approximately 17% or approximately 18% in constant currency. Gross margin per day declined by approximately 11%, or about 10% in constant currency, according to the report. Stable, compared to 2019.

Gross cruise costs per capacity day were $301, down approximately 6% from the previous year. Adjusted net cruise costs, excluding fuel, were approximately $155 in constant currency per capacity day, a decrease of approximately 21% from the prior year.

Q4 2023 results

Gap had a net loss of $106.5 million or EPS of $0.25, compared to a net loss of $482.5 million. The company reported an adjusted net loss of $77.1 million in Q4 2023, or an adjusted EPS of 0.18.

Gross cruise costs per capacity day in the quarter were approximately $280. Adjusted net cruise costs, excluding fuel, per capacity day were approximately $151, representing a decrease of approximately 19% from the fourth quarter of 2022, reflecting the benefits of the cruise improvement initiative. Operating margins of the company.

perspective and guidance

In addition to announcing fourth quarter and full year 2023 results, the company also provided guidance for the first quarter and full year 2024 with related sensitivities.

The Company does not provide certain estimated future results under GAAP because it cannot predict, with reasonable certainty, the future movement of exchange rates or the future impact of certain income and charges.


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