Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated net yield increased by 6.6% from the prior year.
- 95% of 2024 and 55% of 2025 capacity already sold as of August 11, 2024.
- Total revenue grew 9.1% year over year to almost $1.6 billion.
- Adjusted EBITDA for the second quarter totaled $493 million, improving by more than $50 million compared to the same time last year.
- Strong demand trends for 2025 with advanced bookings 20% higher than the 2024 season at the same point in time.
Negative Points
- Net income for the second quarter of 2024 was $156 million, down from $190 million for the same period in 2023.
- The net income includes a loss of $123 million from the revaluation of warrants issued by the company due to stock price appreciation.
- Loss of $66 million related to the net impact of the private placement derivative loss and interest expense related to the company's Series C preference shares.
- Occupancy for the second quarter was 94.3%, which, while high, indicates some room for improvement.
- Vessel expenses, excluding fuel per capacity PCDs, were down only 1.9% year over year, indicating limited cost-saving measures.
Q & A Highlights
Q: How are you thinking about pricing for the remaining 45% of inventory for 2025?
A: We are in a good spot for 2025 and see no need for negative price action. We have time to generate demand through sales and marketing, so pricing would not be our first lever.
Q: Can you explain the decrease in customer deposits from Q1 to Q2?
A: The decrease is due to the seasonal nature of our business. Operations pick up in Q2, leading to a steadying of deposits, which then build up again in Q4 and Q1.
Q: Could you elaborate on the health of the consumer and any regional differences?
A: We haven't seen any signs of weakness for 2025. July was extremely strong, with one of the highest booking weeks ever. We continue to see strong demand trends.
Q: Were there any shifts in spend that impacted Q2 costs, and how should we think about vessel operating costs?
A: The positive cost performance was mainly driven by timing. We manage expenses prudently without compromising quality and look at the business on a long-term basis.
Q: What is the current diluted share count?
A: The current diluted share count is approximately 445,757,520, but due to the timing of the IPO, the EPS calculation involves a weighting.
Q: How do you view the booking curve for 2025 and the opportunity for yield growth?
A: We are in a good position with 55% of 2025 capacity already sold. We aim for mid- to high single-digit yield growth, balancing strong yields with providing good value to our guests.
Q: How are you managing costs related to vessel operations and new flooding?
A: We handle cost management effectively, including ship swaps to minimize canceled cruises. Our operators are cost-conscious and make best efforts to manage deviations.
Q: What is your plan for excess capital given the expected cash build from operations?
A: We focus on ensuring adequate financing and exploring opportunities for growth. If we run out of ideas, we may consider alternatives, but for now, we are comfortable with our cash position.
Q: How do you view the potential for expanding into new customer source markets?
A: We remain focused on the English-speaking market but are exploring opportunities in Asia. However, this is a small part of our business, and we will take a measured approach.
Q: What would be your ideal net leverage target in a stable environment?
A: We do not have a specific target but aim to maintain a comfortable leverage level. We are focused on making money for our shareholders and are comfortable with our current position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
