Income is up, bookings are up, yields are up, but expenses are up. Keep in mind when comparing this to last year; this year includes revenues and costs associated to the Prestige acquisition so it’s a bit hard to compare here.
Norwegian Cruise Line Holdings Ltd. reported financial results for the quarter ended September 30, 2015 and provided guidance for the fourth quarter and full year 2015.
Third Quarter 2015 Highlights
- Adjusted EPS growth of 22% to $1.35 on Adjusted Net Income of $311.1 million.
- Increase in Adjusted Net Yield on a Combined Company basis of 2.2%, or 4.7% on a Constant Currency basis, driven by improved pricing in the quarter. Increase of 19.8% on an as reported basis.
- Adjusted EBITDA increase of 37% to $447.8 million from $326.7 million.
Third Quarter 2015 Results
“The continued momentum from our revenue enhancement strategies resulted in net yield growth of approximately five percent driving strong earnings performance in the quarter,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings. “What is most impressive is that this yield performance was driven purely by organic growth, demonstrating that robust topline growth need not be predicated solely on the addition of new ships to our fleet.”
The Company generated Adjusted Net Income of $311.1 million, or $1.35 per share. Adjusted EPS increased 22% over prior year and was at the top end of the Company’s guidance range, benefiting from solid Net Yield performance. On a GAAP basis, net income was $251.8 million, or $1.09 per share compared to $201.1 million or $0.97 per share in the prior year.
Adjusted Net Yield improved 19.8% (22.7% on a Constant Currency basis) mainly due to the Acquisition of Prestige which occurred in the fourth quarter of 2014. On a Combined Company basis, which compares current results against the combined results of Norwegian and Prestige in the prior year, Adjusted Net Yield increased 2.2%, (4.7% on a Constant Currency basis), reflecting improved pricing in the quarter which was driven by strength in theCaribbean, Bermuda and Alaska itineraries, partially offset by softness in certain Eastern Mediterranean itineraries. Adjusted Net Revenue in the period was $978.2 million compared to $694.4 million in 2014, an increase of 40.9% primarily, as a result of the Acquisition of Prestige.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 30.5% (32.1% on a Constant Currency basis), primarily as a result of the Acquisition of Prestige, while on a Combined Company basis increased 6.4% (7.8% on a Constant Currency basis), primarily due to the timing of marketing expenses and incremental discretionary shipboard enhancement and maintenance costs. The Company’s fuel price per metric ton, net of hedges, decreased 11.7% to $566 from $641 in 2014.
Interest expense, net increased to $49.8 million from $32.3 million as a result of the incremental debt incurred in connection with the Acquisition of Prestige.
The Company repurchased 83,396 shares in the quarter at an average price of $55.94 under its three year, $500 million share repurchase program which was authorized in April 2014. As of September 30, 2015, $413 million remained available for repurchases under the program.