Norwegian Cruise Line Holdings, the world's third largest cruise shipping group, has plunged to a loss in the first quarter of the year on sharp rises in both commission and payroll costs.
Group net loss amounted to $21.5 million compared to a profit of $51.3 million in the first quarter of 2014. Revenues increased sharply, to $938.1 million from $664 million, with the acquisition of Prestige Cruise Holdings in the second half of 2014 boosting the fresh figure.
“I am pleased to report strong earnings out of the gate for our first full quarter of operations following the combination of Norwegian and Prestige late last year,” Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. said in a statement “These results are even more impressive as they come against strong comparables in the prior year, particularly for the Norwegian brand, and headwinds from foreign currency exchange rates,” continued Del Rio.
For the first quarter of 2015, the Company generated stronger than expected adjusted earnings per share of $0.27 on Adjusted Net Income of $62.6 million. Earnings exceeded the Company’s guidance of $0.20 to $0.24 per share and benefited from lower than expected interest expense and better than anticipated Net Yield performance. On a GAAP basis, diluted loss per share and net loss were $0.10 and $21.5 million, respectively, primarily due to transaction and integration related costs.
Adjusted Net Yield improved 18.9% (or 19.9% on a Constant Currency basis) mainly due to the acquisition of the Oceania Cruises and Regent Seven Seas Cruises brands in the fourth quarter of 2014. On a Combined Company basis, which compares current results against the combined results of Norwegian and Prestige in the prior year, Adjusted Net Yield was down 0.7% and essentially flat on a Constant Currency basis against a strong first quarter of 2014 that included the benefit of a one month charter of Norwegian Jade for the 2014 Winter Olympics.
Adjusted Net Revenue for the period increased 46.0% to $728.9 million as a result of the acquisition of the Oceania Cruises and Regent brands as well as approximately one month of incremental sailings from Norwegian Getaway which debuted in early 2014. Revenue in the period increased to $938.2 million from $664.0 million in 2014.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 28.7% (29.3% on a Constant Currency basis), primarily as a result of the Prestige acquisition, while on a Combined Company basis increased 5.6% (6.1% on a Constant Currency basis). The Company’s fuel price per metric ton decreased 18.2% to $526 from $643 in 2014.
The incremental debt from the acquisition drove an increase in interest expense, net to $51.0 million from $31.2 million; however, lower than anticipated interest rates resulted in expense that was lower than the Company’s guidance. Expense of $30.1 million in other income (expense) in 2015 was primarily attributable to a fair value adjustment on a foreign exchange collar for one of the Company’s newbuilds, Norwegian said.