Norwegian Cruise Line today reported results for the quarter ended September 30, 2014, and provided guidance for the fourth quarter and full year 2014.
Third Quarter Highlights
- Adjusted EPS improvement of 29.1% to $1.11 from $0.86 in 2013
- Net Yield increase of 3.0% (2.6% on a Constant Currency basis)
- Revenue increase of 13.7% to 907.0 million
- Adjusted EBITDA increase of 20.5% to $326.7 million
Company agrees to acquire Prestige Cruises International, Inc. (“Prestige Cruises”), the leading cruise operator in the upscale segment, with the transaction expected to close in the fourth quarter of 2014
Third Quarter Results
“Our results this quarter mark an important milestone in Norwegian’s evolution as we report growth in trailing twelve month Adjusted EBITDA for the 25th consecutive quarter coupled with our consistent margin improvement,” said Kevin Sheehan, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “In that more than six year period, Norwegian’s Adjusted EBITDA has grown at an industry-leading compound annual growth rate of 23% with a commensurate margin expansion of over 1,600 basis points to 27.6%, with future expansion expected as we continue to successfully execute on our strategies,” continued Sheehan.
For the third quarter of 2014, the Company reported a 29.1% increase in Adjusted EPS to $1.11, on Adjusted Net Income of $232.2 million, compared to $0.86, on Adjusted Net Income of $182.2 million, for the same period in 2013. On a GAAP basis, diluted earnings per share and net income were $0.97 and $201.1 million, respectively.
Net Revenue in the period increased 16.5% to $694.4 million driven by a 13.1% increase in Capacity Days and a 3.0% improvement in Net Yield. The increase in Capacity Days was primarily from the addition of Norwegian Getaway which entered the fleet in January 2014. The Net Yield improvement was due to higher net ticket and onboard and other revenue. Revenue for the period increased to $907.0 million from $797.9 million in 2013.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 2.6% (2.2% on a Constant Currency basis) which includes investments in the Company’s Norwegian NEXT program which is designed to elevate the guest experience through new enhancements, experiences and transformations. The Company’s fuel price per metric ton, net of hedges, was $641 compared to $695 in 2013.
Interest expense, net increased to $32.3 million in the quarter compared to $26.6 million in 2013 as a result of higher incremental borrowings and interest rates.