NCL Reports Q4 2019 Earnings

Norwegian Cruise Line Holdings Ltd. today reported financial results for the fourth quarter and full year ended December 31, 2019, as well as provided guidance for the first quarter and full year 2020.

©Norwegian Cruise Line
Pride of America ©Norwegian Cruise Line

Full Year 2019 Highlights

  • Company generated GAAP net income of $930.2 million or EPS of $4.30 compared to $954.8 million or $4.25 in the prior year.  Adjusted Net Income was $1.1 billion or Adjusted EPS of $5.09 compared to $1.1 billion or $4.92 in the prior year.  These results include a $0.67 per share impact primarily from the cessation of sailings to Cuba and Hurricane Dorian.
  • Company exceeded full year Adjusted EPS expectations by $0.04 despite a $0.04 impact from unfavorable foreign exchange rates recognized during the fourth quarter. Excluding the aforementioned $0.67 of headwinds, the Company would have surpassed the high end of its initial February 2019 Adjusted EPS guidance by $0.46.
  • Total revenue increased 6.7% to $6.5 billion. Gross Yield increased 4.6%.  Net Yield increased 3.6% on a Constant Currency basis, outperforming November guidance by 60 basis points. If not for the previously mentioned adverse external impacts, Net Yield on a Constant Currency basis would have been 200 basis points higher and would have exceeded the high end of the Company’s initial February 2019 Net Yield guidance by 160 basis points.  
  • Record-breaking introduction of Norwegian Encore, the final Breakaway Plus Class Ship, the most successful class in the Company’s history.
  • Successful repositioning of Norwegian Joy from China to the North American market.
  • Norwegian Cruise Line became first major global cruise company to eliminate single-use plastic water bottles fleetwide as part of Company’s global sustainability program, Sail & Sustain.
  • Unveiled Silver Cove, the new and exclusive oceanfront resort-style enclave at Great Stirrup Cay, the Company’s private island in the Bahamas.
  • Enhanced Company’s newbuild profile with orders for two new vessels for Oceania Cruises and one for Regent Seven Seas Cruises for delivery in 2022, 2023 and 2025.
  • Announced several strategic initiatives to further strengthen the Company’s premier position in the popular and profitable Alaska cruise market.
Norwegian Joy sea trial

Full Year 2020 Expectations

  • Company entered year with a record booked position and at higher pricing. Despite the current known impact from the COVID-19 coronavirus outbreak, as of the week ending February 14, 2020, the Company’s booked position remained ahead of prior year and at higher prices on a comparable basis, which excludes cruises to Cuba in the prior year and the recent redeployment of Norwegian Spirit from Asia in the current year.
  • Excluding both known and unknown impacts from the COVID-19 outbreak, Adjusted EPS for full year 2020 is expected to be in the range of $5.40 to $5.60 reflecting 2.0% to 3.0% Constant Currency Net Yield growth. 
  • The current known direct impact to operations from COVID-19 is expected to be approximately $0.75 per share and primarily includes customer incentive compensation and 40 cancelled, modified or redeployed Asia voyages across the Company’s three brands. This includes the close-in redeployment of 21 cancelled Asia voyages on Norwegian Spirit which have been redeployed to the Eastern Mediterranean for summer 2020 with an extremely condensed booking window.
  • The COVID-19 outbreak continues to impact consumer travel sentiment regarding travel for cruises in Asia and throughout the Company’s areas of operation worldwide. The duration and extent of this indirect impact cannot be quantified at this time and is therefore not included in the approximately $0.75 known direct impact outlined above.
  • Prior to COVID-19, the Company was on a solid trajectory to achieve its Full Speed Ahead 2020 Targets established at its May 2018 Investor Day. Given the known and quantifiable direct impact of COVID-19 to-date of approximately $0.75, the Company does not anticipate achieving these targets by year-end but remains committed to expanding Adjusted ROIC, growing Adjusted EPS, maintaining a strong balance sheet and returning capital to shareholders.
  • First quarter 2020 Adjusted EPS is expected to be approximately $0.48 reflecting approximately 0.25% Constant Currency Net Yield growth. This guidance excludes known and unknown impacts from the COVID-19 outbreak in the quarter.
  • Company launched Regent’s Seven Seas Splendor, the second ship in the highly successful Explorer Class.  Captain Serena Melani, a 30-year veteran, will helm the ship and was the first woman in cruise industry history to captain a brand-new ocean cruise ship at launch.
  • Continued expansion of the Company’s global sustainability program, Sail & Sustain, with the creation of a new ESG department solely focused on further developing the Company’s ESG strategy.
  • Company to debut new dedicated flagship terminal at PortMiami, the “Pearl” of Miami.     

“I am pleased to announce that Norwegian Cruise Line Holdings’ business model once again demonstrated its resilience in the face of significant exogenous headwinds by delivering yet another successful year in 2019, which included the sixth consecutive year of record revenue and earnings per share and seventh consecutive year of Net Yield growth,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.  “As a result of the strong global demand for cruises witnessed throughout 2019, we entered 2020 in the best booked position and at prices higher than last year’s record levels. This trend continued through late January until the COVID-19 outbreak began having an adverse impact on our business. We have taken several proactive measures to protect the health and safety of our guests and crew throughout our fleet, including implementing strict protocols regarding passenger embarkation, and in an abundance of caution have cancelled or modified several voyages in the Asia region through the third quarter of this year.  While the effect of these impacts cannot be fully quantified at this time, our Company has an exemplary track record of demonstrating its resilience in challenging environments and we remain confident in our ability to deliver strong financial performance over the long-term.”