Norwegian Cruise Line Holdings Ltd (NCLH), the world’s third largest listed cruise shipping group, said it would continue to work on its financial flexibility and that booking trends for next year were encouraging. However, it forecast a net loss for the fourth quarter of 2022.
“We are on track to generate positive Adjusted Free Cash Flow in the fourth quarter as we continue to march towards our expected return to historical occupancy levels beginning in the second quarter of 2023,” said Mark A. Kempa, executive vice president and chief financial officer.
“We are proactively working to further enhance our financial flexibility and liquidity, including the amendment and extension of our Operating Credit Facility which we expect to complete by year-end,” he said in a statement.
As expected, NCLH’s current cumulative booked position for the fourth quarter of 2022 is below the comparable 2019 period but at higher prices even when including the dilutive impact of future cruise credits (“FCCs”). “Dilution from value-add FCCs issued during the pandemic will not carry over into 2023 as the bonus portion of these FCCs expire at year-end 2022,” the company said.
Booking trends for full year 2023 remain positive with cumulative booked position equal to record 2019 levels inclusive of increase in capacity. “Pricing is significantly higher than that of 2019 at a similar point in time for full year 2023. Net booking volumes continue to be at the pace needed to reach historical Load Factor levels in 2023,” NCLH said.
At the end of September, NCLH’s advance ticket sales balance, including the long- term portion, was $2.5 billion. “This includes approximately $260 million of FCCs or approximately 10% of the total deposit balance. Approximately 60% of the FCC balance outstanding has been applied to future sailings. Gross advance ticket sales build was approximately $1.5 billion during the quarter, in line with the prior quarter,” the company noted.
NCLH said that as a result of the COVID-19 pandemic, the effects of the Russia-Ukraine conflict and current macroeconomic conditions, it would report a net loss for the fourth quarter of 2022.
