Tag Archives: operating loss

Norwegian Cruise Line reports $1.9bn loss

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NCL's CEO Frank Del Rio Collected Over $17,800,000 in 2019 - 1,052 ...

Norwegian Cruise Line reported a first-quarter loss of $1.9 billion, with the impact of a coronavirus-enforced suspension of sailings exacerbated by a $1.6 billion write-down in goodwill.

However, Norwegian Cruise Line insisted it is now “well-positioned” to withstand even 18 months of suspended operations after raising $2.4 billion in funds in early May.

Norwegian Cruise Line president and chief executive officer Frank Del Rio said: “We’ve taken decisive action to strengthen our financial position, including our highly successful and oversubscribed $2.4 billion capital raise announced last week.

“We believe this, coupled with other liquidity-enhancing initiatives, makes us well-positioned to weather an unlikely scenario of over 18 months of suspended voyages.”

Del Rio added: “We continue to experience demand for voyages in the future across our three brands.

“As we prepare to resume sailings, we’re working alongside the US and global public health agencies and governments to develop and implement enhanced cruise health and safety standards.”

He reported, “demand for cruise vacations particularly beginning in the fourth quarter of 2020, accelerating through 2021”.

Norwegian described overall bookings and pricing for 2021 as “within historical ranges”.

The cruise line noted all three of its brands had begun the year “in a record booked position and at higher prices” than last year despite a 7% increase in capacity.

However, it reported “slightly over half of the guests” had declined to rebook or accept cruise credits in place of cash refunds for cancelled cruises despite being offered “typically 125% of the cruise fare paid.

The company’s credits are valid through to the end of December 2022.

Norwegian revealed it had $1.8 billion of advance ticket sales at the end March, of which $800 million were for cancelled voyages to the end of June and $370 million for voyages scheduled for the second half of this year.

Norwegian Cruise Line Breakaway Ship Review | Kelsie Lou's Blog

The company said it continues to take bookings for later this year, 2021 and 2022, and to receive new deposits and final payments.

Norwegian reported it has pared its operating costs to between $70 million and $110 million per month while voyages are suspended, following a series of cost-cutting measures.

Additional capital-spending reductions and deferred debt payments mean its monthly cash burn has been reduced to between $120 million and $160 million per month.

However, this excludes cash refunds to customers.

Norwegian noted it had debts totalling $8.6 billion at the end of March, with available cash and cash equivalents of just $1.4 billion.

However, a series of capital markets transactions launched on May 5 had raised $2.4 billion, including a $400 million investment by US private equity firm L Catterton.

Norwegian Cruise Line chief financial officer Mark Kempa said: “Our swift actions to preserve cash and secure additional liquidity provide a strong foundation to withstand the operational and financial impact of Covid-19.

“We are confident the company can navigate through an unlikely extended zero-revenue scenario and emerge in a strong position.”

Revenue rises, but IPO expenses put Norwegian Cruise Line in the red

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Revenue rises, but IPO expenses put Norwegian Cruise Line in the red
By Tom Stieghorst
Norwegian Cruise Line posted a $96.4 million first-quarter loss, but said accounting rules that require it to recognize some one-time expenses masked a solid improvement in its business.

Revenue rose to $527.6 million from $515.4 million.

Norwegian said that without $110 million in expenses related to its public offering in January, income would have been $12.9 million. Norwegian’s net profit was $3.3 million in last year’s first quarter.

“We had a fantastic quarter — above consensus,” said CEO Kevin Sheehan in an interview.

The expenses include costs tied to prepaying bonds and stock compensation for former executives.

Sheehan said by using the proceeds of the public offering, Norwegian was able to replace secured debt that carried 11.5% interest rates with unsecured debt that costs about 5%.

Norwegian raised $447 million in the quarter by selling 23.5 million shares for $19 each.

Excluding fuel, net cruise costs fell 1.5% in the quarter. Sheehan said the expense of introducing Norwegian Breakaway will likely raise cruise costs by 5% to 6% in the current quarter.

The New York-themed Breakaway is set to arrive before daybreak on May 7 at the Manhattan Cruise Terminal. The ship will be named the next day by the Rocketttes before starting a series of seven-day cruises to Bermuda.

Thomas Cook reviews future of its airline

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Thomas Cook reviews future of its airline

By Phil Davies

Thomas Cook reviews future of its airlineThe future of Thomas Cook’s airline business is under review as part of chef executive Harriet Green’s turnaround plans for the loss-making group.

The disclosure came in the wake of moves to dispose of unspecified non-core assets to bring in as much as £150 million.

Green yesterday announced an additional £50 million of cost savings, taking the total to £350 million by 2015. This helped lift Cook shares almost 16% to 100.75p.

Part of those savings include £65 million from bringing its four airlines, which have 86 aircraft and employ 6,500 people, into one group.

Green would not rule out the disposal of all or part of the airline business.

“Does Thomas Cook need to have an airline in the future?” she told the Financial Times. “We have options. We are reviewing whether we should continue with the airlines that we have.”

The group had “over-complicated the business” through a series of acquisitions, including airlines, said Green.

“In essence, it is not a complex business that shouldn’t demand huge amounts of debt,” she said.

Green believed the group had become weak in its city break and winter sun offers, and would start to offer new products pitched at women and children.

The restructuring includes the closure of 195 high street agencies, contributing to the loss of 2,500 jobs.

New targets include 50% online sales and an earnings before interest and tax margin of 5%, both by 2015.

Cook earns about one-third of its revenues from online sales and the remainder from its outlets, according to the FT.

The group confirmed that a review of its capital structure could result in a future share placing.

“When that review is complete we will decide on what action we should take, if any, including whether to raise new debt and/or equity capital and the amount and structure of any such capital raising,” the company said.

Wyn Ellis, analyst with Numis, told the newspaper: “We wait to see how it progresses: a lot of hard work needs to be done if it is to succeed with its ‘high-tech, high-touch’ approach.”

James Hollins, analyst at Investec, said: “There is no update on a potential equity issue or refinancing…Current trading is stated to be ‘progressing well’ for the key summer period and the full-year 2013 outlook is ‘encouraging’.”