NCLH reports rise in second quarter and first half earnings on strong demand

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 08 August 2019 08 August 2019

Norwegian Cruise Line Holdings Ltd (NCLH), the world’s third largest cruise shipping group, has reported an increase in both second quarter and first half  net income p[lus operating income on strong demand.

Net income in the second quarter rose to $240.2 million from $226.7 million in the same period last year, while operating income rose to $308.9 million from $292.1 million, Revenues reached $1.65 billion, an increase from $1.52 billion year on.

In the first six months of the year, NCLH’s net income rose to $358.3 million from $329.8 million and operating income rose to $466.9 million from $459.2 million. Revenues increased to $3.07 billion from $2.82 billion.

“The Company generated Adjusted Net Income of $282.1 million or Adjusted EPS of $1.30 compared to $271.9 million or $1.21 in the prior year,” NCLH said in a statement.

“Continued robust demand for our global brands along with our strong consumer focused value proposition, honed revenue management practices and best guest marketing strategy, enabled us to continue to drive ticket pricing higher which, when coupled with strong onboard revenue performance, resulted in record second quarter results,” said Frank Del Rio, president and chief executive officer of NCLH.

“The underlying fundamentals of our business remain strong across all core markets, and we continue to expect record financial results in 2019, despite the impact from the change in federal regulations which resulted in the cessation of premium-priced Cuba sailings, ” he added.

Increase in revenues in the second quarter was primarily attributed to an increase in capacity days as a result of the addition of Norwegian Bliss to the fleet in 2018 along with an increase in net yield driven by the repositioning of Norwegian Joy to North America, robust onboard spending along with strong growth in organic pricing across all core markets. Gross yield increased 7.5%. Net yield increased 5.8% on a constant currency basis and 5.0% on an as reported basis.

Total cruise operating expense increased 11.1% in 2019 compared to 2018, primarily due to an increase in capacity days as a result of the addition of Norwegian Bliss to the fleet in 2018 and the redeployment of Norwegian Joy to North America. 

Gross cruise costs per capacity day increased 8.3%. Adjusted net cruise cost excluding fuel per capacity day increased 6.1% on a constant currency basis and 5.1% on an as reported basis. Fuel price per metric ton, net of hedges increased to $493 from $481 in 2018.  The company reported fuel expense of $100.5 million in the period, NCLH said.

 

 

Genting Hong Kong to sell 35% stake in Dream Cruise to North American investors

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 07 August 2019 07 August 2019

Genting Hong Kong, the largest cruise shipping group headquartered in Asia, said it would sell 35% of its Dream Cruises premium market unit to TPG Capital Asia, TPG Growth and Ontario Teachers’ Pension Plan.

“The consideration for the 35% equity interest is US$489 million, valuing Dream Cruises total equity at US$1,397 million. With assumption of net debt of US$1,871 million, the enterprise value of the transaction is US$3,268 million. The transaction will result in a gain of approximately US$470 million, which will increase the net asset value of each GHK shares by US 5.5 cents or HK 43 cents,” Genting Hong Kong said in a statement

The purchase will be made in two tranches, with the first guaranteed tranche of at least 24.5% for US$342 million expected in September, and a second tranche of up to 35% in total expected by December of 2019. Additional incentive payments will be paid on achievement of certain profitability level of Dream Cruises and delivery of each of the Global Class ships.

"Dream Cruises is the premium brand for the fast growing Asian-sourced cruise passenger, with the vision that they will be able to cruise globally in all regions of the world with Dream Cruises,” said Tan Sri KT Lim, Chairman and CEO of GHK.

“The investment by TPG and Ontario Teachers’ will help Dream Cruises to have the youngest and technologically most advanced fleet of quality German built cruise ships with legendary Asian service. And we are delighted to partner again with TPG as we did on Norwegian Cruise Line Holdings Ltd. in 2008,” he added.

 

The two Global class ships will be of 204,000 gross tons and they are on order at MV Werften, which is also owned by Genting Hong Kong.