ΔΙΕΘΝΗΣ ΕΛΛΗΝΙΚΗ ΗΛΕΚΤΡΟΝΙΚΗ ΕΦΗΜΕΡΙΔΑ ΠΟΙΚΙΛΗΣ ΥΛΗΣ - ΕΔΡΑ: ΑΘΗΝΑ

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Πέμπτη 30 Οκτωβρίου 2014

Norwegian Cruise Line reports financial results for the third quarter 2014


Wiesbaden, October 30, 2014 – Norwegian Cruise Line (NASDAQ: NCLH, Norwegian Cruise Line Holdings Ltd., NCL Corporation Ltd., “Norwegian” or “the Company”), yesterday reported results for the quarter ended September 30, 2014, and provided guidance for the fourth quarter and full year 2014.
Third Quarter Highlights
  • Adjusted EPS improvement of 29,1% to $1,11 from $0,86 in 2013
  • Net Yield increase of 3,0% (2,6% on a Constant Currency basis)
  • Revenue increase of 13,7% to $907.0 million
  • Adjusted EBITDA increase of 20,5% to $326,7 million
  • Company agrees to acquire Prestige Cruises International, Inc. (“Prestige Cruises”), the leading cruise operator in the upscale segment, with the transaction expected to close in the fourth quarter of 2014
Third Quarter Results
“Our results this quarter mark an important milestone in Norwegian’s evolution as we report growth in trailing twelve month Adjusted EBITDA for the 25th consecutive quarter coupled with our consistent margin improvement,” said Kevin Sheehan, President and Chief Executive Officer of Norwegian Cruise Line Holdings Ltd. “In that more than six year period, Norwegian’s Adjusted EBITDA has grown at an industry-leading compound annual growth rate of 23% with a commensurate margin expansion of over 1.600 basis points to 27,6%, with future expansion expected as we continue to successfully execute on our strategies,” continued Sheehan.

For the third quarter of 2014, the Company reported a 29,1% increase in Adjusted EPS to $1,11, on Adjusted Net Income of $232,2 million, compared to $0,86, on Adjusted Net Income of $182,2 million, for the same period in 2013. On a GAAP basis, diluted earnings per share and net income were $0,97 and $201,1 million, respectively.

Net Revenue in the period increased 16,5% to $694,4 million driven by a 13,1% increase in Capacity Days and a 3,0% improvement in Net Yield. The increase in Capacity Days was primarily from the addition of Norwegian Getaway which entered the fleet in January 2014. The Net Yield improvement was due to higher net ticket and on-board and other revenue. Revenue for the period increased to $907,0 million from $797,9 million in 2013.

Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 2,6% (2,2% on a Constant Currency basis) which includes investments in the Company’s Norwegian NEXT program which is designed to elevate the guest experience through new enhancements, experiences and transformations. The Company’s fuel price per metric ton, net of hedges, was $641 compared to $695 in 2013.

Interest expense, net increased to $32,3 million in the quarter compared to $26,6 million in 2013 as a result of higher incremental borrowings and interest rates.

2014 Guidance and Sensitivities
In addition to the results for the third quarter, the Company also provided the following guidance for the fourth quarter and full year 2014, along with accompanying sensitivities. This guidance excludes the impacts from the acquisition of Prestige Cruises which is expected to close in the fourth quarter of 2014.

“We are confident that we will achieve our target of over 60% growth in full year Adjusted EPS that we established at the beginning of the year. This achievement will once again demonstrate our resilience and ability to deliver consistent financial performance despite the external headwinds that occurred throughout the year,” said Sheehan.

Fourth Quarter 2014

Full Year 2014

As Reported

Constant Currency

As Reported

Constant
Currency
Net Yield
3,5 to 4,0%

4,0 to 4,5%

3,2 to 3,3%

3,2 to 3,3%
Adjusted Net Cruise Cost
Excluding Fuel per Capacity Day (1)
Flat to down slightly

Flat

Flat to up slightly

Flat to up slightly
Adjusted EPS
$0,37 to $0,41

$2,28 to $2,32
Depreciation and amortization
$63 to $66 million

$252 to $255 million
Interest Expense, net
$32 to $35 million

$127 to $130 million
Effect on Adjusted EPS of a
1% change in Net Yield (2)
$0,02

$0,02
(1)     Full year includes two dry docks
(2)     Based on midpoint of guidance

The following reflects the Company’s expectations regarding fuel consumption and pricing, along with accompanying sensitivities.

Fourth Quarter 2014

Full Year 2014
Fuel consumption in metric tons
130.000

502.000
Fuel price per metric ton, net of hedges
$615

$630
Effect on Adjusted EPS of a 10% change
in fuel prices, net of hedges
$0,01

Immaterial

As of September 30, 2014, the Company had hedged approximately 91%, 59%, 50% and 10% of its remaining 2014, 2015, 2016 and 2017 projected metric tons of fuel purchases, respectively.

Future capital commitments consist of contracted commitments, including future expected capital expenditures for business enhancements and ship construction contracts. As of September 30, 2014 anticipated capital expenditures together with amounts for ship construction and related export credit financing were as follows (in thousands, based on the euro/U.S. dollar exchange rate as of September 30, 2014:




Fourth Quarter

Full Year



2014

2014

2015

2016

Ship construction

$ 63.889

$ 847.785

$ 924.203

$ 253.517

Ship financing

(42.341)

(737.119)

(712.770)

(139.495)

Ship construction net of financing

$ 21.548

$ 110.666

$ 211.433

$ 114.022

Business Enhancement Capital Expenditures, including ROI
Capital Expenditures (1) (2) (3)

$ 35.000

$ 98.000

$ 83.000

$ 90.000

Incremental ROI Capital Expenditures for exhaust gas scrubbers

$ 14.000

$ 27.000

$ 27.000

$ 10.000






(1)           Fourth Quarter and Full Year 2014 include $23 million and $49 million in ROI Capital Expenditures, respectively.
(2)           Fourth Quarter and Full Year 2014, 2015 and 2016 exclude amounts for exhaust gas scrubbers.
(3)           Fourth Quarter and Full Year 2014 and 2015 include investment for development of the Company’s future cruise destination in Belize.

Company Updates and Other Business Highlights
In September, the Company announced an agreement to acquire Prestige Cruises, the parent company of Oceania Cruises and Regent Seven Seas Cruises, for total transaction consideration of $3,025 billion in cash, stock and the assumption of debt, for which fully committed financing is in place. Additionally, contingent cash consideration of up to $50 million would be payable to Prestige shareholders upon achievement of certain 2015 performance metrics. The acquisition is expected to be accretive to 2015 earnings excluding synergies with day one identified synergies of $25 million resulting in high single-digit percentage adjusted EPS accretion. The acquisition is expected to close in the fourth quarter of 2014.

The combination of the Norwegian, Oceania Cruises and Regent brands immediately creates an industry-leading cruise operator with an unmatched growth trajectory and a portfolio of products that span across the key market segments of the cruise industry. With approximately 6.400 berths across its two brands, Prestige Cruises is the market leader in the upscale cruise space, which is comprised of brands in the upper premium and luxury segments. The upper premium segment is served by Oceania Cruises, which specializes in destination-oriented cruise holidays, gourmet culinary experiences, elegant accommodations and personalized service on a fleet of five mid-size ships. Prestige Cruises’ luxury brand, Regent Seven Seas, offers the industry’s most all-inclusive holiday experience on board three all-suite ships to be joined by a fourth, Seven Seas Explorer, in the summer of 2016.

Norwegian’s newest ship, Norwegian Escape, is on track for an on-time delivery in October 2015. A keel laying ceremony was held on September 19, marking the official start of construction. At 164.000 gross tons and 4.200 berths, Norwegian Escape is the Company’s largest ship to date and will house the largest edition of Norwegian’s innovative ship within a ship complex, The Haven by Norwegian. Built on the same innovative platform as the Company’s Breakaway-class ships, Norwegian Escape will combine proven offerings with new designs and features. Among the popular elements carried over from the Breakaway class are the innovative public spaces The Waterfront and 678 Ocean Place. The Waterfront is Norwegian’s revolutionary boardwalk experience where guests can choose to enjoy an outdoor experience at several restaurants and lounges with unobstructed views that strengthen guests’ connection with the ocean. On deck 8, The Waterfront connects to 678 Ocean Place, a three-deck space lined with restaurants, lounges and entertainment venues that serves as the ship’s hub of activity. Guest favourites such as Cagney’s Steakhouse and O’Sheehan’s Neighborhood Bar & Grill will be joined by new dining and entertainment venues that will be announced in coming months.