Norwegian Cruise Line Remains Strong in Q3

Norwegian Cruise Line Holdings Ltd reported an adjusted net income of USD 311.1 million for the quarter ended September 30, 2015.

The cruise liner said that its adjusted EPS increased was 22 pct over prior year and was at the top end of the company’s guidance range, benefiting from solid net yield performance.

On a GAAP basis, net income was USD 251.8 million, or USD 1.09 per share when compared to USD 201.1 million or USD 0.97 per share in the prior year.

“The continued momentum from our revenue enhancement strategies resulted in net yield growth of approximately five percent driving strong earnings performance in the quarter,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings.

 “What is most impressive is that this yield performance was driven purely by organic growth, demonstrating that robust topline growth need not be predicated solely on the addition of new ships to our fleet.” 

Adjusted net yield improved 19.8% (22.7% on a Constant Currency basis) mainly due to the acquisition of Prestige in 2014. On a combined company basis, adjusted net yield increased 2.2%, reflecting improved pricing in the quarter which was driven by strength in the Caribbean, Bermuda and Alaska itineraries, partially offset by softness in certain Eastern Mediterranean itineraries, NCL said.

The company’s adjusted net revenue in the period was USD 978.2 million compared to USD 694.4 million in 2014, an increase of 40.9%, primarily as a result of the Prestige takeover.

As a result of strong net yield performance the company has increased its full year 2015 adjusted net yield guidance. Namely, NCL raised the midpoint of its full year 2015 adjusted EPS guidance which is now USD 2.85 to USD 2.90.

“The alignment of revenue management strategies across our three brands has resulted in a lengthening of the booking curve, enabling us to drive higher pricing, particularly on the Norwegian brand,” said Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings.

“This stronger pricing is contributing to robust earnings growth of approximately 27% in 2015, and brings our three year compound annual growth rate to over 40% since our initial public offering in 2013,” continued Beck.

The company is scheduled to take delivery of two additional ships in 2016. Sirena will join Oceania Cruises in March with her first sailing in late April following a 35-day, multi-million dollar upgrade and refurbishment. Seven Seas Explorer will join the Regent fleet in the third quarter.

“The momentum from the initiatives we have implemented is building and is reflected in the solid foundation of bookings which, coupled with the powerful earnings growth from our existing fleet and upcoming ship additions, have positioned 2016 to be a breakout year,” said Del Rio.

“With a clear path to significant earnings growth, we are confident in our targets of $5.00 earnings per share in 2017 and growing our already industry leading return on invested capital to 14% by 2018.”