Norwegian Cruise Line Holdings: Q2 2021 Results & Business Update – Cruise Industry News

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Norwegian Cruise Line Holding today announced financial results for the second quarter ended June 30, 2021 and released a business update.

“Last week we reached a historic milestone in our great cruise comeback with the successful start of our relaunch with the first ship in our fleet, the Norwegian Jade, sailing the Greek islands. Tomorrow will be our first US cruise in over 500 days, when Norwegian Encore sets sail from Seattle for Alaska, ”said Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings.

The company expects about 40% of its fleet capacity to be in operation by the end of the third quarter of 2021 and about 75% by the end of 2021, with the entire fleet expected to be operational again by April 1, 2022.

“As we resume operations, we’re putting health and safety first with our robust, science-based SailSAFE health and safety program, including our 100% Vaccination Policy, which applies to all of our three brands’ voyages, welcoming our guests back on board and continue to see an incredible strength in our booking trends for future cruises. Our team is working tirelessly to implement our plan to bring our entire fleet back into service by April 2022 to capitalize on this unprecedented backlog. “

According to the company’s press release for the second quarter, bookings for future periods remain strong despite lower sales and marketing investments and a travel agency industry that has not been in full swing since the pandemic began.

The booking and price development until 2022 is still very positive, driven by a lot of catching up to do. The company said it is seeing robust future demand across all brands, with the cumulative total booked position for full year 2022 well above 2019 record highs at higher prices, even after taking into account the dilutive effects of future cruise credits (“FCCs”).

The company’s pre-sale ticket sales totaled $ 1.4 billion, including the long-term portion which is approximately $ 800 million in FCCs as of June 30, 2021.

The company’s average monthly cash usage for the second quarter of 2021 was around $ 200 million, up from its previous forecast of about $ 190 million and up from the previous quarter as it prepares to resume service this summer. Looking ahead, according to a press release, the company expects its average monthly cash usage to increase to approximately $ 285 million in the third quarter of 2021, driven by the continued gradual relaunch of additional ships.

This cash burn rate does not include the expected inflows of funds from new and existing bookings.

“We are focused on the flawless execution of our recommissioning plan, including the gradual recommissioning of all 28 of our ships by April 2022, which is the first step on our recovery path,” said Mark A. Kempa, Executive Vice President and Chief Financial Officer of the company Norwegian Cruise Line Holdings. “Recognizing that the global healthcare environment remains volatile, we continue to focus on controlling costs, balancing our liquidity needs and improving our liquidity position to maintain financial flexibility.”

For the second quarter, GAAP net loss was $ (717.8) million or earnings per share (1.94) compared to a net loss of $ (715.2) million or $ 2.99 a year ago. The company reported an adjusted net loss of $ (714.7) million or adjusted earnings per share of $ (1.93) in 2021, which included $ 3.1 million in net adjustments. That compares to an adjusted net loss and adjusted earnings per share of $ (666.4) million and (2.78), respectively, in 2020.

Revenue declined to $ 4.4 million from $ 16.9 million in 2020 as travel was again suspended for the full quarter.

The total cost of ownership for cruises decreased 17.2% in 2021 compared to 2020. In 2021, cruise operating costs were primarily related to crew costs, including salaries, meals and other travel expenses, fuel and other running costs such as insurance and ship maintenance.

The price of fuel per ton with no hedges increased from $ 594 in 2020 to $ 673. The company reported fuel bills of $ 54.1 million for the period.

Net interest expense was $ 137.3 million in 2021 compared to $ 114.5 million in 2020. The increase in interest expense reflects additional outstanding debt at higher interest rates, partially offset by lower LIBOR. 2020 included losses from debt repayment and debt adjustment costs of $ 21.2 million.

Other income (expense), net, was $ 25.5 million in 2021 compared to expense of $ (14.4) million in 2020. In 2021, income was primarily fuel swap profits, that have not been designated as hedges.


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