Norwegian Cruise Line Holdings has reported monetary outcomes for the second quarter ended June 30, 2024 and offered steering for the third quarter and full 12 months 2024.
Second Quarter 2024 Highlights
- Generated file second quarter complete income of $2.4 billion, an 8% enhance in comparison with the identical interval in 2023 on 4% capability development, with GAAP web earnings of $163.4 million, or EPS of $0.35. Efficiency was pushed by robust income development and continued deal with value reductions and efficiencies.
- Adjusted EBITDA grew 14% to $587.7 million in comparison with $514.8 million for a similar interval of 2023 and above steering of $555 million. Adjusted EPS grew 33% to $0.40, which compares to $0.30 within the second quarter of 2023, exceeding steering of $0.32.1
- The Firm’s sustained deal with margin enhancement drove one other quarter of enchancment in working prices. Gross Cruise Prices per Capability Day was roughly $315 for the quarter. Adjusted Internet Cruise Prices excluding Gas per Capability Day was roughly $163 on an as reported and Fixed Foreign money foundation, higher than steering, and flat year-over-year when excluding the anticipated ~$9 influence of the incremental Dry-docks and the associated discount in Capability Days.
- Occupancy was 105.9% for the quarter, barely above steering, and complete income per Passenger Cruise Day elevated roughly 2%, in comparison with second quarter 2023.
- Gross margin per Capability Day was up 7% versus 2023 on an as reported and Fixed Foreign money foundation. Internet Yield development beat steering by 200 foundation factors, rising over prior 12 months by roughly 6.3% on an as reported and Fixed Foreign money foundation attributable to robust close-in demand and onboard income efficiency.
- Whole debt was $13.4 billion. Internet Leverage was 5.9x for the 12-months ended June 30, 2024, attaining year-end aim of decreasing Internet Leverage by ~1.5x from December 31, 2023 6-months early.
- Introduced Charting the Course 2026 targets at Could 2024 Investor Day, detailing a daring new imaginative and prescient to “Trip Higher. Expertise Extra.” with strong monetary targets.
2024 Outlook
- 2024 full 12 months Internet Yield steering on a Fixed Foreign money foundation elevated 100 foundation factors from the prior steering to roughly 8.2% from 7.2%.
- 2024 full 12 months Adjusted EBITDA steering elevated $50 million from the prior steering to roughly $2.35 billion from $2.30 billion.
- 2024 Adjusted Internet Cruise Prices excluding Gas per Capability Day steering remained unchanged at flat to prior 12 months excluding the influence of Dry-docks.
- Full 12 months Adjusted Internet Earnings steering elevated $60 million from prior steering to roughly $790 million from $730 million, and Adjusted EPS steering elevated over 8%, or $0.11 to $1.53 from $1.42.
- On monitor to realize double-digit Adjusted ROIC by year-end.
“2024 continues to be an distinctive 12 months when it comes to our monetary efficiency, as evidenced by our robust second quarter outcomes which exceeded steering throughout the board. As we elevate our full-year steering a 3rd time, we count on our Adjusted EPS to develop roughly 120% in comparison with 2023, pushed primarily by our means to capitalize on the strong market demand and making certain our company are vacationing higher and experiencing extra throughout our manufacturers,” remarked Harry Sommer, president and chief government officer of Norwegian Cruise Line Holdings Ltd.
“The momentum we’re garnering from robust yield development, disciplined value administration and the initiatives that comprise our Charting the Course technique additional bolsters our confidence in attaining our beforehand introduced 2026 monetary and sustainability targets,” continued Sommer.
Enterprise, Operations and Reserving Setting Replace
The Firm continues to expertise robust client demand as nearly all of new bookings are pivoting to 2025 sailings. Because of this, the Firm stays on the higher vary of its optimum booked place on a 12-month ahead foundation. Occupancy was 105.9% for the second quarter of 2024, barely above steering. Full 12 months 2024 Occupancy is predicted to common 105.2%, barely above prior steering.
As well as, prime line development within the second quarter was additionally robust. Gross margin per Capability Day was roughly $124 within the quarter, up 7% versus 2023 on an as reported and Fixed Foreign money foundation. Internet Yield development was up roughly 6.3% versus 2023 on an as reported and Fixed Foreign money foundation, above steering by 200 foundation factors attributable to robust close-in demand and onboard income efficiency. The Firm’s advance ticket gross sales stability, together with the long-term portion, ended the second quarter of 2024 at an all-time file excessive of $3.9 billion, roughly 11% greater than the identical interval of 2023.
The Firm demonstrated continued progress on its ongoing margin enhancement initiatives to maximise income alternatives and proper measurement its value base. Gross Cruise Prices per Capability Day was roughly $315 within the second quarter, which was flat versus final 12 months. Adjusted Internet Cruise Prices excluding Gas per Capability Day within the second quarter of 2024 was roughly $163 on an as reported and Fixed Foreign money foundation and was primarily flat year-over-year excluding the anticipated ~$9 influence from elevated Dry-dock days and associated prices and higher than steering of $165, as value financial savings measures absolutely offset a rise in variable compensation attributable to robust efficiency of the enterprise.
For the total 12 months 2024, the Firm elevated its Internet Yield steering by 100 foundation factors from prior steering to development of roughly 8.2% from roughly 7.2% on a Fixed Foreign money foundation in comparison with 2023. The rise in steering is pushed by robust demand throughout all three manufacturers and itineraries.
Full 12 months Adjusted Internet Cruise Value Excluding Gas per Capability Day steering remained unchanged and is predicted to be roughly $159, rising roughly 3.5% in Fixed Foreign money, which incorporates an approximate 300 foundation level influence from Dry-dock days and associated prices within the 12 months. Excluding this influence, Adjusted Internet Cruise Value Excluding Gas per Capability Day could be primarily flat year-over-year.
Adjusted Operational EBITDA Margin for the total 12 months 2024 is predicted to extend to 34.5% and full 12 months 2024 Adjusted EBITDA steering elevated by $50 million to $2.35 billion. Adjusted EPS steering was elevated by $0.11, or 8%, to roughly $1.53 from roughly $1.42.
Liquidity and Monetary Place
The Firm is dedicated to prioritizing efforts to optimize its stability sheet and cut back leverage. As of June 30, 2024, the Firm had complete debt of $13.4 billion and Internet Debt of $12.8 billion. Internet Leverage improved by roughly 1.5 turns in comparison with December 31, 2023, ending the second quarter of 2024 at 5.9x and attaining our year-end aim 6 months early. The Firm introduced at its Investor Day that it plans to scale back its Internet Leverage to the mid 4’s by 2026.
In the course of the quarter, as anticipated, considerably all of the holders of the 6% 2024 Exchangeable Notes exchanged their 2024 Exchangeable Notes for shares with any remaining unexchanged notes being repaid in money at maturity.
At quarter-end, liquidity was $2.7 billion. This consists of roughly $594.1 million of money and money equivalents, $1.2 billion of availability underneath our undrawn Revolving Mortgage Facility, a $650 million undrawn backstop dedication, and different commitments.
“We enter the second half of 2024 with robust momentum, exceeding our steering metrics in every quarter of 2024 on the again of robust execution. We proceed to see strong demand heading into the again half of the 12 months and are dedicated to bettering efficiencies, decreasing prices, and restoring our margins in a strategic and disciplined method. Given our robust progress so far and present demand expectations, we’re elevating our 2024 full-year steering for a 3rd time this 12 months for key metrics leading to anticipated Adjusted EPS development of 120% versus 2023, whereas conserving our value steering for the 12 months unchanged at flat to prior 12 months,” mentioned Mark A. Kempa, government vice chairman and chief monetary officer of Norwegian Cruise Line Holdings Ltd.
Kempa continued, “Moreover, we made important advances in decreasing Internet Leverage and de-risking our stability sheet throughout the first half of 2024. We’ve got already completed our year-end aim of decreasing Internet Leverage by a full flip and a half versus year-end 2023, ending the quarter at 5.9x. We stay assured that our robust liquidity place, ongoing money technology, and favorable development prospects will allow us to proceed to de-risk our stability sheet additional bolstering our path to attaining the 2026 Charting the Course monetary targets laid out at our current Investor Day.”
Second Quarter 2024 Outcomes
GAAP web earnings was $163.4 million or EPS of $0.35 in comparison with $86.1 million or EPS of $0.20 within the prior 12 months. The Firm reported Adjusted Internet Earnings of $203.7 million or Adjusted EPS of $0.40 within the second quarter of 2024. This compares to Adjusted Internet Earnings and Adjusted EPS of $137.0 million and $0.30, respectively, within the second quarter of 2023. Adjusted EBITDA within the second quarter was roughly $587.7 million, higher than steering of $555 million, and elevated 14% in comparison with 2023, pushed primarily by strong income efficiency and Adjusted Internet Cruise Value Excluding Gas that was primarily flat year-over-year excluding the influence of Dry-docks.
Gross Cruise Prices per Capability Day was roughly $315 within the quarter. Adjusted Internet Cruise Prices excluding Gas per Capability Day was roughly $163 on an as reported and Fixed Foreign money foundation, which incorporates roughly $9 associated to Dry-docks, and would have been primarily flat year-over-year with out these Dry-dock impacts, reflecting the advantages from the Firm’s ongoing margin enhancement initiative.
The Firm reported gas expense of $175 million within the quarter. Gas worth per metric ton, web of hedges, elevated barely to $719 from $715 in 2023. Gas consumption of 243,000 metric tons was barely higher than projections.
Curiosity expense, web was $178.5 million in 2024 in comparison with $177.7 million in 2023.
Different earnings (expense), web was an earnings of $1.9 million in 2024 in comparison with an expense of ($8.0) million in 2023. The earnings and expense primarily relate to web good points and losses on international forex.
Outlook and Steerage
Along with asserting the outcomes for the second quarter 2024, the Firm additionally offered steering for the third quarter and full 12 months 2024, together with accompanying sensitivities. The Firm doesn’t present sure estimated future outcomes on a GAAP foundation as a result of the Firm is unable to foretell, with affordable certainty, the longer term motion of international change charges or the longer term influence of sure good points and expenses. This stuff are unsure and can rely on a number of components, together with business situations, and could possibly be materials to the Firm’s outcomes computed in accordance with GAAP. The Firm has not offered reconciliations between the Firm’s 2024 steering and essentially the most immediately comparable GAAP measures as a result of it might be too tough to arrange a dependable U.S. GAAP quantitative reconciliation with out unreasonable effort.