NCLH loss widens, back to positive cash flow seen in Q2

The company also expects positive adjusted net income in the second half.

Net booking trends have improved sequentially over the past few weeks. The reserved position for the first half of 2022 is below the extraordinarily high levels of 2019 at significantly higher prices, even taking into account the dilutive impact of future cruise credits, while the reserved position for the second half is in line with the comparable period of 2019, at higher prices, including the impact of FCCs. The position recorded for each quarter compared to the comparable quarter in 2019 improves sequentially throughout the year.

At the end of the year, NCLH’s advance ticket sales balance was $1.8 billion, which includes approximately $0.7 billion from FCC.

Fourth trimester

Fourth quarter adjusted net loss was $765 million, a loss of $1.95 per share, higher than Wall Street’s expectation of a loss of $1.60 per share, and compared to the loss of $683.8 million, or $2.33 per share a year ago. GAAP net loss was $1.6 billion, or $4.01 per share, compared to a net loss of $0.7 billion, or $2.51, a year earlier.

Revenue rose to $487.4 million, below consensus expectations of $571.85 million and compared to $9.6 million in 2020.

51.4% occupancy

High ticket prices and onboard expenses resulted in a positive contribution from vessels that operated. Occupancy was 51.4%, reflecting company self-imposed limits, the effect of COVID-related booking cancellations and a significant increase in capacity from the prior quarter.

230,000 passengers transported

Around 70% of NCLH’s capacity was operated across all three brands at year end, with over 230,000 passengers carried.

After the Omicron disruptions, the company now expects 85% of its capacity to be in service by the end of the first quarter, with a full fleet returning by the start of the second quarter.

“The past few months have also had their share of challenges caused by the impacts of the Delta and Omicron COVID surges, but despite these challenges which were mostly beyond our control, our reserved position and pricing remain strong, particularly for the second half of 2022 and into 2023, demonstrating strong fundamental demand for our cruise offerings,” said NCLH President and CEO Frank Del Rio.

Strong trends for 2023

Booking trends for 2023 demonstrate continued strong demand for medium to long term sailings with significantly higher reserved position and prices and at record levels compared to bookings for 2020 in 2019.

Liquidity

At the end of the year, NCLH’s total debt was $12.4 billion and liquidity was $2.7 billion. This month, the company raised approximately $2.1 billion through a series of debt transactions to further optimize its balance sheet.

These transactions are expected to result in annual cash interest savings of approximately $75 million.

Average monthly cash consumption

Average monthly cash burn in the fourth quarter was around $345 million, slightly below the estimate of around $350 million. NCLH expects monthly average cash burn to increase to approximately $390 million in the first quarter, due to the continued phased ship relaunch.

2021 annual results

Adjusted net loss for 2021 was $2.9 billion, or a loss of $8.07 per share, compared to an adjusted net loss of $2.2 billion, or $8.64 per share in 2020. GAAP net loss was $4.5 billion, or $12.33 per share, compared to a net loss of $4 billion, or $15.75 per share, the prior year. Total revenue decreased 49.4% to $0.6 billion from $1.3 billion in 2020.

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