NCLH signals higher 2018 profit, deployment moves boost 2020 outlook

Frank Del Rio - Year-over-year gains in occupancy and pricing have accelerated since last earnings call Frank Del Rio - Year-over-year gains in occupancy and pricing have accelerated since last earnings call

Norwegian Cruise Line Holdings expects to raise guidance for the full year 2018 when it reports second quarter earnings in August. Further, the company anticipates the host of deployment changes announced today will add approximately 30 cents in incremental adjusted earnings per share in full year 2020.

Changes 'slightly accretive' in 2019

In 2019, incremental earnings driven by higher yields commanded from a partial year of new deployments will be substantially offset by a one-time, non-cash write-off of approximately $25m stemming from the upgrades and enhancements to Norwegian Joy, lost revenue for the five weeks out of service to complete the enhancements and reposition the vessel and additional expenses to market the redesigned itineraries.

As a result, the company expects the itinerary optimizations to be slightly accretive to adjusted EPS in full year 2019.

2018 guidance likely going up on Aug. 9

For 2018, strong organic earnings resulting from continued robust global demand are expected to more than offset impacts from higher fuel prices, fluctuating foreign exchange rates and additional redeployment-related items. As a result, NCLH expects to raise full year 2018 adjusted EPS guidance when it reports second quarter financial results on Aug. 9.

'The booking environment for cruise demand shows no signs of slowing,' said Frank Del Rio, president and CEO, NCLH. 'Occupancy for the second half of 2018 continues to be ahead of last year with pricing well ahead of last year’s record levels. Similarly, the booked position for full year 2019 not only remains well ahead of the prior year’s record levels, the year-over-year gains in occupancy and pricing have also accelerated since our last earnings call.'

NCLH scheduled a conference call to discuss Q2 results at 10 a.m. ET Aug. 9. The call will be simultaneously webcast via www.nclhltdinvestor.com.

Demand commentary a 'catalyst' for investors

In a note, Wells Fargo Securities said the company's 'demand commentary will be a catalyst for investors who have been viewing the group as “cheap” and largely discounting known capacity concerns through 2022 along with fuel/FX, to commit incremental funds to the group.' The brokerage reiterated its 'bullish view on the cruise sector.'

NCLH shares were up more than 5% to over $50 mid-morning Wednesday. The stock has traded in a range of $46.16 and $61.48 over the past 52 weeks.

Posted 18 July 2018

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Anne Kalosh

Editor, Seatrade Cruise News & Senior Associate Editor Seatrade Cruise Review