Norwegian Posts Strong Update on Bookings and Earnings

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Norwegian Cruise Line Holdings (NCLH) has reported better-than-anticipated first-quarter results, signaling a strong and long-awaited recovery.

Occupancy rates, in particular, show how Norwegian’s slow and steady approach is starting to pay off, pushed on by a strong performance during Wave season in the first quarter, with those results expected to increase further during the remainder of 2023.

However, it’s not just occupancy and bookings that are looking strong. Across nearly all financials, the cruise company scores well, beating the guidance for EBITDA, earnings per share, and onboard revenue. Following the release of the financial results, NCLH’s stock price rose by more than 6% after markets opened.

Revenue and Net Income Soar

Norwegian Cruise Line Holdings announced its financial results for the first quarter of 2023 today, May 1, showing impressive growth.

The results signal a strong and long-awaited recovery for the third-largest cruise company in the United States, one that was received well by investors, with the stock price going up by nearly 7% in the first trading hours.

Total revenue reached $1.8 billion, up from $521.9 million in the first quarter of 2022, although the earnings per share still lagged at -0.38 cents per share. This is still an improvement from the previous year when NCLH reported a loss of $2.35 per share.

Norwegian Cruise Line Holdings Office
Photo Credit: JHVEPhoto / Shutterstock

This means that Norwegian can adjust its 2023 Adjusted Earnings Per Share guidance to approximately $0.75 for 2023, turning green for the first time since the pandemic.

“As we continue to focus on rebuilding our financial track record, we are pleased to report that we met or exceeded guidance on all key metrics in the first quarter, buoyed by the strong consumer demand we are experiencing across our brands,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd. 

Bookings & Occupancy

Surging consumer demand comes on the heels of a popular and well-received Wave season. Norwegian Cruise Line Holdings saw occupancy rates onboard its ships shoot past the 100% mark, averaging 101.5% for the first quarter, 1.5% above the expected 100% occupancy rates.

Norwegian expects the occupancy rates to increase to 105% in the second quarter. The strong interest in cruising has gradually allowed Norwegian Cruise Line Holdings to fill up their ships since the restart last year.

Norwegian Bliss Cruise Ship in Seattle
Norwegian Bliss Cruise Ship in Seattle (Photo Courtesy: Port of Seattle)

The cruise company is taking a slow but steady approach that is now starting to pay off. For the entire year 2023, NCLH predicts an average occupancy rate of 103.5%, higher than in 2019 despite having 18% more capacity than four years ago. 

Harry Sommer, President of Norwegian Cruise Line: “We continue to experience healthy demand across the board as evidenced by our record booked position as well as robust onboard revenue generation.”

As of March 31, 2023, Norwegian Cruise Line Holdings reported holding a record $3.4 billion in advance ticket sales. Not only is NCLH selling more and more diverse cruises than ever before, but it is also doing so at higher prices. It means that CEO Frank Del Rio can rest assured he is leaving NCLH in a healthy financial state. 

Frank Del Rio Hands Over Healthy NCLH

On March 31, 2023, Norwegian Cruise Line Holdings had $13.1 billion in debt and $1.9 billion in available funds, including cash, loans, and other commitments. 

Although these numbers are weaker than the company’s position before 2020, the solid first-quarter results and bookings for the remaining year allow Frank del Rio to leave NCLH in a reasonably strong financial state.

Frank J. Del Rio
Photo Courtesy: Norwegian Cruise Line

“With the post-pandemic operational recovery complete and the Company solidly positioned for 2023 and beyond, now is the right time to make way for the next generation of leaders who are ready to take this Company on to its newest chapter,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings.

Incoming President and CEO Harry Sommer added he is looking forward to bringing an increased focus on financial recovery, creating a greener company, but also ensuring that service levels and guest experiences stay high: 

“We are embarking on an exciting new chapter with an industry-leading growth profile including one new ship for each of our brands in 2023, beginning with Oceania Cruises’ outstanding Vista which we took delivery of just last week.”

”We are also focused on improving profitability and accelerating our financial recovery, while maintaining the superior service levels and the exceptional guest experience our loyal guests expect from our amazing brands.”

Those service levels and guest experiences will be under scrutiny from Norwegian Cruise Line’s loyal guests in particular, with the cruise line removing multiple services from its standard offerings, such as twice-daily housekeeping service, and even reducing entertainment onboard.

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