Norwegian Cruise Line Holdings Ltd (NCLH, Financial) released its 8-K filing on October 31, 2024, reporting robust financial results for the third quarter ended September 30, 2024. The company, known as the world's third-largest cruise company by berths, operates 32 ships across three brands—Norwegian, Oceania, and Regent Seven Seas—offering both freestyle and luxury cruising. Norwegian Cruise Line Holdings Ltd has redeployed its entire fleet as of May 2022 and is expanding its brand globally with 13 passenger vessels on order through 2036.
Performance and Challenges
Norwegian Cruise Line Holdings Ltd reported record third-quarter revenue of $2.8 billion, marking an 11% increase compared to the same period in 2023. This growth was driven by a 4% increase in capacity and strong demand, particularly in Alaska and Canada-New England. The company achieved a GAAP net income of $474.9 million, a 37% increase from the previous year, with earnings per share (EPS) rising to $0.95, surpassing the analyst estimate of $0.93. Despite a $0.06 per share negative impact from foreign exchange rates, the company managed to exceed its guidance across all key metrics.
Financial Achievements
The company's financial achievements are significant in the Travel & Leisure industry, where cost control and margin enhancement are crucial. Norwegian Cruise Line Holdings Ltd's Adjusted EBITDA grew by 24% to $931.0 million, setting a quarterly record high. The company's focus on cost reductions and efficiencies resulted in a Gross Cruise Cost per Capacity Day of approximately $314, with an Adjusted Net Cruise Cost excluding Fuel per Capacity Day of approximately $155, better than the guidance of $156.
Income Statement and Key Metrics
Key details from the income statement reveal total revenue of $2.8 billion, with passenger ticket revenue at $1.94 billion and onboard and other revenue at $861.7 million. The company's operating income reached $691.2 million, up from $523.3 million in the previous year. Norwegian Cruise Line Holdings Ltd's total debt stood at $13.4 billion, with a net leverage of 5.58x, showing a reduction from December 31, 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $2.8 billion | $2.54 billion |
| GAAP Net Income | $474.9 million | $345.9 million |
| Adjusted EBITDA | $931.0 million | $752.1 million |
| EPS | $0.95 | $0.71 |
Analysis and Outlook
Norwegian Cruise Line Holdings Ltd's performance underscores the strength of its business model and the effectiveness of its cost management strategies. The company's ability to exceed guidance and raise its full-year outlook for the fourth time highlights its resilience and adaptability in a competitive market. The company's focus on optimizing its balance sheet and reducing leverage is evident in its successful refinancing efforts and improved net leverage ratio.
Our exceptional third quarter results, with record revenue, net income and Adjusted EBITDA, surpassed guidance across all key metrics, underscoring the strength of our business," said Harry Sommer, President and CEO of Norwegian Cruise Line Holdings Ltd.
With strong consumer demand and strategic initiatives in place, Norwegian Cruise Line Holdings Ltd is well-positioned to continue its growth trajectory, making it an attractive prospect for value investors seeking opportunities in the Travel & Leisure sector.
Explore the complete 8-K earnings release (here) from Norwegian Cruise Line Holdings Ltd for further details.
