NCLH reports Q1 loss but strong demand as early 2022 cruise bookings top 2019 levels

Adjusted net loss was $666.6m, or $2.03 per share, just under Wall Street's expectation of a $2.05 per share loss. However, the $3.1m in revenue was a fraction of the $10.52m consensus forecast.

The loss included $701.6m of adjustments primarily for expenses related to losses on debt extinguishment and modifications associated with the repurchase of L Catterton exchangeable notes.

Year-ago adjusted net loss was $211.3m, or 99 cents per share, on $1.2bn in revenue.

US GAAP net loss was $1.4bn, or $4.16, compared to a GAAP net loss of $1.9bn, or $8.80 a year ago.

Strong bookings

Bookings have been strong for future periods, resulting in an elongated booking window. During Q1, overall bookings, net of cancellations, were more than double the volumes during the prior quarter. 

2022 booking and pricing trends are 'very positive,' driven by strong pent-up demand. The company reported robust future demand across all brands with the overall cumulative booked position for the first half of 2022 'meaningfully ahead' of 2019’s record levels with pricing higher when excluding the dilutive impact of future cruise credits.

At March 31, NCLH had $1.3bn of advance ticket sales, including the long-term portion of advance ticket sales, which includes approximately $0.85bn of FCCs.

Monthly average cash burn

Q1 monthly average cash burn was in line with prior guidance at approximately $190m, or approximately $170m per month excluding previously disclosed nonrecurring debt modification costs.

NCLH paid approximately $50m of one-time debt deferral and modification costs and fees in the quarter as a result of successful debt deferrals and covenant waivers and suspensions which, combined with newbuild payment extensions, resulted in approximately $1bn of additional liquidity through first quarter 2022.

For Q2, the company expects its cash burn rate to average approximately $190m per month as it prepares for a return to service this summer.

Liquidity

At March 31, NCLH's total debt position was $12.2bn while cash and cash equivalents totaled $3.5bn.

'We completed several strategic capital markets transactions in the quarter, raising over $1 billion of incremental liquidity and further extending our debt maturity profile. This included the opportunistic repurchase of the L Catterton senior exchangeable notes which allowed us to proactively manage our balance sheet, reduce debt and unlock additional value for our shareholders,' EVP/CFO Mark Kempa said.