Norwegian Cruise Line Holdings Ltd (NCLH), the world’s third largest listed cruise ship operator, has reported a deep loss for the second quarter due to the Covid-19 outbreak and said it is unable to give a guidance regarding its result for the rest of the year.
While revenues decreased, interest expenses almost doubled due to rising debt.
Group net loss amounted to $715.2 million compared to a profit of $240.2 million profit in the prior year. Revenue decreased to $16.9 million compared to $1.7 billion in 2019 due to the complete suspension of voyages in the quarter.
Interest expense, net was $114.5 million in 2020 compared to $66.0 million in 2019. The change in interest expense reflects additional debt outstanding, partially offset by lower LIBOR rates. Included in 2020 were losses on extinguishment of debt and debt modification costs of $21.2 million compared to $1.2 million in 2019.
Total cruise operating expense decreased 68.5% in 2020 compared to 2019. “In 2020, our cruise operating expenses were primarily related to the continued payment of protected commissions as additional sailings were cancelled, crew costs, including salaries, food and repatriation costs, and fuel,” NCLH said in a statement.
“As a consequence of Covid-19, while the Company cannot estimate the impact on its business, financial condition or near- or longer-term financial or operational results with certainty, it expects to report a net loss on both a U.S. GAAP and adjusted basis for the third quarter ending September 30, 2020 and the year ending December 31, 2020,” the company said.
