The high demand of the global brands of the company drives revenues and profits to record levels in the second quarter
The guide for the fiscal year reflects superior performance in the second quarter and stronger revenue prospects for the second half of 2019
The Norwegian Encore, which will be released in November 2019, remains the ship with routes through the Caribbean with the best performance in the company’s history
The solid reservation system will continue in 2020
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (jointly with NCL Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian” or the “Company”) today announced the second quarter financial results, closed on 30 June 2019, and has also provided guidance for the third quarter and the whole year 2019.
• The company generated a net income under the GAAP of $ 240.2 million and a profit per share (BPA) of $ 1.11, compared to the PCGA net income of $ 226.7 million and a BPA of 1 , $ 01 of the previous year. Adjusted net income reached $ 282.1 million and the adjusted BPA was $ 1.30, compared to adjusted net income of $ 271.9 million and the BPA of $ 1.21 the previous year.
• Total revenues amounted to 1,700 million dollars, which represents an increase of 9.3%. Gross Yield increased 7.5%. Net Yield increased 5.8% over a constant exchange rate.
• The adjusted BPA for the whole year is expected to be placed within the fork of $ 5.00 to $ 5.10, including an unfavorable effect of $ 0.45 due to the sharp change in federal regulations surrounding cruise ships to Cuba, as well as an impact of $ 0.07 for a technical problem related to Norwegian Pearl in July. If there were no setbacks, the company’s outlook would have exceeded its May guidance, mainly as a result of the superior revenue performance in the second quarter, along with stronger revenue prospects for the second half of the year.
• The company is on the right track to achieve the 2020 goals it offered on Investor Day 2018.
“The continuous and solid demand of our global brands, our firm proposal to value the consumer, our improved revenue management practices and the best marketing strategy for passengers have allowed us to continue promoting the price of tickets, which, together With a great income return on board, it has resulted in record results in the second quarter. The underlying fundamentals of our business remain strong in all major markets and we continue to expect record financial results in 2019, despite the consequences of the change in federal regulations, which caused the cessation of trips to Cuba that had very good prices. ” , says Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings Ltd.
Results for the second quarter of 2019
GAAP reached $ 240.2 million and the BPA was $ 1.11, compared to the PCGA net income of $ 226.7 million and the BPA of $ 1.01 the previous year. The company generated adjusted net income of $ 282.1 million and the adjusted BPA was $ 1.30, compared to net income of $ 271.9 million and the BPA of $ 1.21 of the previous year.
Revenue amounted to $ 1.7 billion, representing an increase of 9.3%, compared to $ 1.5 billion in 2018. This increase was mainly due to an increase in capacity days as a result of the incorporation of the Norwegian Bliss to the fleet in 2018, together with an increase in Net Yield driven by the repositioning of Norwegian Joy in North America, an important on-board loan along with a powerful growth in organic prices in all major markets. Gross Yield increased 7.5%. Net Yield increased 5.8% on a constant exchange rate and 5.0% on an audited currency base.
Total cruise management expenses increased 11.1% in 2019 compared to 2018, mainly due to an increase in capacity days as a result of the incorporation of Norwegian Bliss to the fleet in 2018 and the relocation of Norwegian Joy to North America. Gross cruise costs per capacity day increased by 8.3%. The adjusted net cost of the cruise per capacity day, not including fuel, increased 6.1% on a constant exchange rate basis and 5.1% on an audited currency basis.
The price of fuel per metric ton, after coverage, increased to $ 493 of the $ 481 it had in 2018. The company declared fuel costs worth $ 100.5 million in that period.
Net interest expenses decreased from $ 73.0 million in 2018 to $ 66.0 million in 2019. The decrease in interest expenses reflects lower outstanding debt balances and lower margins caused by recent refinancing, partially offset by financing of new construction and an increase in LIBOR rates. Net interest expenses also included losses due to cancellation of the $ 1.1 million debt in 2019 and 6.3 million dollars in 2018.
The review of other net revenues showed revenues of $ 3.6 million in 2019, compared to $ 12.9 million in 2018. In 2019, revenues were primarily related to earnings from insurance and income from insurance. resolution of a dispute being partially offset by foreign exchange losses and, in 2018, income was generated mainly with foreign exchange earnings.
Forecasts for 2019
“The combination of the solid and continuous demand environment, the growing enthusiasm for the upcoming releases of Norwegian Encore and Seven Seas Splendor and our firm step towards achieving our goals for 2020 is laying the groundwork for another year to be marked next year. milestone for the company, ”says Mark A. Kempa, Executive Vice President and Chief Financial Officer of Norwegian Cruise Line Holdings Ltd.“ Our commitment remains to maximize shareholder profitability and we believe that our current valuation does not reflect the solid fundamentals of our bussines; therefore, we will focus our capital allocation strategy on opportunistic share buybacks. ”
Guide and sensitivities for 2019
In addition to announcing the financial results of the second quarter of 2019, the company also provided a guide for the third quarter and for the entire 2019, along with the accompanying sensitivities. The company does not provide guidance under GAAP because it cannot predict with reasonable certainty the future movement of exchange rates or how they will affect certain earnings and charges in the future. These elements are uncertain and will depend on several factors, such as industry conditions, and could also be important for the company’s results calculated in accordance with GAAP. The company has not facilitated reconciliations between the company’s 2019 guide and the most directly comparable GAAP measures because it would be very difficult to prepare a reliable quantitative reconciliation of US GAAP. UU. Without excessive effort.
As of June 30, 2019, the company had covered approximately 72%, 56%, 47% and 13% of the total metric tons of fuel consumption planned for the rest of 2019 and the years of 2020, 2021 and 2022, respectively. The following table shows the amounts covered and the price per barrel of heavy fuel oil («HFO») that have been covered using 3% of U.S. Gulf Coast («USGC») and sea diesel («MGO») that have been covered using diesel.
Future capital commitments consist of contractual commitments, such as ship construction contracts and expected future capital expenditures necessary for operations, as well as our ship renovation projects and other strategic investments. As of June 30, 2019, the expected capital expenditures were $ 1.2 billion for the rest of 2019, and $ 1.2 billion and $ 700 million for the years ended December 31, 2020 and 2021, respectively . We have funds from an export credit agency for the planned expenses related to boat construction contracts of 600 million dollars for the rest of 2019, in addition to 500 million dollars and 200 million dollars for the years ended 31 December 2020 and 2021, respectively.