NCLH shares fell more than 8% in pre-market-open trading.
Cash flow turned positive in March
The company generated positive operating cash flow of approximately $260m in the quarter after turning positive in March. NCLH expects slightly positive adjusted EBITDA in the second half and continues to target exceeding historical record net yield and adjusted EBITDA levels for full year 2023.
Q2
Adjusted net loss of $478.3m, or $1.14 per share, was greater than Wall Street's 86-cent consensus, but down from the loss of $714.7m, or $1.93 per share, a year ago. US GAAP net loss was $509.3m, or $1.22 per share, versus the $717.8m loss, or $1.94 per share, in Q2 2021.
Revenue was $1.2b, close to the consensus of $1.26b, and down fron $4.4b in 2021 due to the costs of voyage resumption.
Strong pricing, onboard revenue, higher costs
The company reported strong ticket pricing and onboard revenue with total revenue per passenger cruise day up nearly 20% in Q2 versus 2019.
Cruise operating expense increased on higher payroll, fuel and direct variable costs of fully operating ships, compared to Q2 2021, when no voyages carried passengers. Costs were also impacted by inflation and continued COVID-19-related costs including testing.
Fuel price per metric ton, net of hedges, rose to $836 from $673 in 2021.
65% occupancy, ramping up to low 80% range in Q3
In early May, NCLH became the first major cruise operator to have all ships back in service. Q2 occupancy was 65%, in line with expectations, and 17 points higher than in Q1. Numerous voyages across several key markets achieved occupancy higher than 100%.
Occupancy levels are expected to average in the low 80% in Q3 with July voyages averaging approximately 85%.
NCLH expects to reach historical occupancy levels in Q2 2023.
Q3 and second half
For Q3, the company expects revenue per passenger cruise day to increase high-single digits versus 2019, despite the 'significant' impact of the Russia-Ukraine conflict on certain premium-priced European itineraries. Total revenue is expected to be $1.5b to $1.6bn.
A net loss is forecast.
The current booked position for the second half of 2022 remains below the comparable 2019 period but at higher prices even when including the dilutive impact of future cruise credits.
Adjusted net cruise cost excluding fuel per capacity day is expected to decrease by approximately 10% in the second half versus first half of 2022.
2023 strength
'We are encouraged by the continued strong consumer demand we are experiencing which is reflected in our record pricing, accelerating booking volumes, especially for 2023 and beyond, and highest ever onboard revenue generation,' said Frank Del Rio, president and CEO, NCLH. He added the company remains committed to protecting its 'industry-leading pricing, which we firmly believe is the best way to maximize long-term value for all our stakeholders.'
Booking trends for full year 2023 remain positive with cumulative booked position in line with a record 2019 inclusive of the company’s 20% capacity increase. Pricing continues to be significantly higher than that of 2019 at a similar point in time and thus at record levels for full year 2023.
Booking volumes
Net booking volumes continue to increase as the company’s brands ramp up to sail at historical load factors.
Advance ticket sales balance increased approximately $0.3b in the recent quarter to $2.5b as of June 30, an all-time high. This includes approximately $0.4b of FCCs or 16% of the total deposit balance. Approximately 75% of the FCC balance outstanding has already been applied to future sailings. Gross advance ticket sales build was approximately $1.5b in Q2, an approximately $0.5b increase from Q1 and the highest level since the start of the pandemic.
Liquidity
Total debt position at June 30 was $13.2b and liquidity was approximately $2.9b, consisting of cash and cash equivalents of $1.9b and a $1b undrawn commitment. In July NCLH extended that undrawn commitment through March 2023, with no current plans to draw it, as a 'liquidity backstop.'
Relaxed COVID protocols
Yesterday NCLH announced vaccinated travelers 12 and older will no longer have any pre-cruise COVID-19-related protocols and unvaccinated travelers may sail with a negative COVID-19 test taken within 72 hours prior to embarkation. Passengers 11 and under will be exempt from all vaccination and testing requirements.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
Add Seatrade Cruise News to your Google News feed.  |
