Norwegian Cruise Line has good news to report. Despite a rough start to the year, NCL has seen its stock rise. Applying effective marketing strategies, and efficient business tactics have seen the company to a favorable outlook. All the while, overall stock market trends are not favorable can Norwegian Cruise Line continue its rise?
Norwegian Cruise Lines Holding shares have seen a significant rise, since the summer of 2014. The 70% return over that time span has left the cruise liner with a 39% increase in revenue and 27% increase in profits for 2015. Part of that success is due to the addition of 164,600 ton Norwegian Escape in 2015, this vessel and lower fuel cost have helped the company overall performance.
The cruise liner owns and operates a fleet of 23 vessels, which is nothing in comparison to Royal Caribbean’s 44 ships and Carnival Corporation’s 99 ships. Even though Norwegian is much smaller than its competitor, the company is right there when it comes to net profit. This is truly important to add, because NCL is keeping most of its profits. Instead of paying all to shareholders as its rivals do. That indicates higher price to earnings ratio, indicating higher premium on growth over the year.
Norwegian Cruise Line expects three more ships to be acquired through 2019, bringing the fleet count up to 27. If fuel stays low through-out the year, this would also be a support for 2016 revenue and profit. A reduction in passengers due to deteriorating economic conditions or uncertainty is a possibility, over the coming years.
A good note to add, is that Norwegian cruise Lines has generated an average of $200 million from its fleet of 22 vessels, during 2015. Royal Caribbean generated $190 million from its fleet of 44 vessels. While, Carnival Corporation the largest of the cruise liners only generated $160 million.