Norwegian Cruise Line Holdings announced its third-quarter 2020 earnings on Monday after the market closed
“The new framework for UC’s conditional sailing order is a step in the right direction on the road to a safer and healthier resumption of sailing at UC, reinforcing our current strict commitment to health and safety,” said Frank Del Rio, President and CEO For the Norwegian Cruise Line, we will continue to collaborate with the Center for Disease Control and Prevention (CDC) on next steps to relaunch operations with a common goal of protecting the health and safety of our guests, staff and the communities we visit. Holdings Ltd. « While we have a long way to go, we are encouraged by the constant demand for future marine holidays, especially from our loyal past guests, across all of our three brands »
U-letter The Centers for Disease Control and Prevention (« CDC ») has issued a framework for a conditional sailing order that replaces a no-sail order, which will allow cruise ship passenger operations in the United States of water under certain conditions. The stages described in the conditional order include the following:
The Norwegian said that while the police order is a step forward in resuming sailing at UQ, there remain significant uncertainties regarding certain requirements of a conditional order including pending technical instructions for future phases.
“The company will continue to work with both CDC and its expert advisors to improve its overall health and safety strategy and compliance with all aspects of the conditional order,” the company said in a press release.
In September the Healthy Sail Panel team, a team of 11 globally recognized experts brought together by the company in collaboration with the Royal Caribbean Group, presented a 66-page report containing 74 detailed best practices across five focus areas for improving the health and safety of passengers and crew, and reducing Risks of infection and the spread of COVID-19 on board cruise ships, according to Norwegian, adding that the cornerstone of the plan is comprehensive COVID-19 testing of 100% of all guests and crew before boarding the plane
While booking volumes since the advent of the global COVID-19 pandemic remain below historical levels, there is still demand for future cruises, particularly those that commence on cruises operating in the second half of 2021 and beyond, though Of limited demand Marketing efforts
“Our overall reserved position for the first half of 2021 remains below the historical ranges as expected due to the current uncertain environment, however, for the second half of 2021, it is in line with the historical ranges,” the company said in the earnings release
“Pricing for 2021 is fully in line with pre-pandemic levels, even after including the mitigating effect of future cruise balances. Future pent-up demand for cruises is evidenced by record booking achievements in September and October including the sale of a Labor Day promotion at Oceania Cruises which It was the most successful holiday offering in the history of the line, a new record for opening day cruises at Regent Seven Seas Cruises 2023 World Cruise and the largest new single booking day ever in Regent history with the launch of the Voyage Collection 2022-2023 ‘
As of September 30, 2020, the company had $ 1 billion in advance ticket sales, including the long-term portion of advance ticket sales, which includes nearly $ 0 $ 85 billion in future cruise credits
Norwegian said its financial business plan includes reducing previously executed costs and cash preservation levers which include reducing operating and capital expenditures, improving the company’s debt maturity profile and securing additional capital.
As of September 30, 2020, the company’s total debt position was $ 10 USD 9 billion and cash and cash equivalents for the company were $ 2 4 billion The company has complied with all debt obligations as of September 30, 2020
The company’s average monthly cash burn rate for the third quarter of 2020 was approximately $ 150 million.
For comparison purposes, assuming ships remain in minimal employment, the average cash-burn rate in the fourth quarter of 2020 will be roughly $ 175 million a month higher, mainly driven by the time of interest calculation, the Norwegian said
For the second half of 2020, this will result in an average monthly cash burn rate of around $ 160 million, in line with the target rate the company previously announced during the flight suspension. This cash burn rate and its estimate include running ship operating expenses, and expenses Administrative operating, interest expenses, taxes, projected capital expenditures, and excludes cash refunds for customer deposits, cash inflows from new and existing bookings, other working capital changes, and preparation of resumption of the trip unexpected costs and expenses This cash burn rate and estimate also reflects a postponement of amortization Debts and payments related to new construction until March 31, 2021
Due to the smoothness of the voyage resume schedule and associated expenses, the company estimates that the actual cash burn rate for Q4 2020 will be higher than the comparative figure indicated above. The average monthly cash burn is expected to increase as ships prepare to return to service due to the associated additional costs. Re-employment, repositioning and provision of vessels, implementation of new health and safety protocols, increased disciplined demand – generating marketing investments
“We are focused on positioning the company not just to endure the prolonged disruption of COVID-19 but to exit this period with a clear path to long-term financial recovery,” said Mark A. Kimba, Executive Vice President and CFO of Norwegian Cruise Line Holdings Ltd. “Our actions Rapid adaptation to this unprecedented environment by reducing costs, preserving cash and enhancing our liquidity profile will enhance our efforts to navigate COVID-19, restart our ships and in the long term, improve our balance sheet and resume our business. A track record of strong financial performance. «
GAAP net income (loss) was $ 677 4 million or EPS of (250) compared to $ 450 6 million or $ 2 09 in the previous year. The company reported adjusted net income (loss) of ($ 638) 7. Million or adjusted earnings per share of (235), in 2020, which included 38 $ 6 million adjustments consisting mainly of expenses related to non-cash compensation and losses on amortization of debts and their adjustments This compares with adjusted net income and adjusted earnings per share of 481 $ 5 million and $ 2 23, Respectively, in 2019, which included 30 $ 9 million adjustments consisting mainly of expenses related to non-cash compensation
The yield decreased to $ 6 5 million compared to $ 1 billion in 2019 due to the complete halt of flights in the quarter
In 2020, cruise operating expenses were mainly related to crew costs, including salaries, food and other repatriation costs, fuel, and other ongoing costs such as insurance and ship maintenance
Fuel price per metric ton increased, net hedging to $ 592 from $ 504 in 2019 the company reported fuel expense of $ 48 2 million in the period In addition, a net loss of $ 11 million was recorded in revenue (expenses) Other, net mainly related to the cancellation of the fuel hedge allocation as a result of the expected reduction in fuel consumption resulting from flight cancellations due to COVID-19
Net interest expense was $ 139 $ 7 million in 2020 compared to $ 60 million in 2019, reflecting the change in interest expense additional debt owed at higher interest rates, partially offset by lower LIBOR and 2020 included losses related to debt amortization and debt adjustment costs of $ 6 6000000
Another (expense) income, net was an expense of $ 23 $ 7 million in 2020 compared to an income of $ 10 million in 2019 in 2020, the expenses were mainly related to foreign exchange losses and losses in fuel hedges recognized in $ 11 profit Australia: 9 million net losses were recorded this quarter mainly related to the cancellation of fuel hedges as a result of lower expected fuel consumption resulting from flight cancellations due to the Corona virus
As a result of COVID-19, while the company said it could not estimate the impact on its business, financial position, or financial or operational results in the near or long term with certainty, it would report a net loss for every aspect of GAAP and the adjusted basis for the fourth quarter. And the year ending December 31, 2020
Norwegian Cruise Line, Cruise ship, NYSE: NCLH, Stock, Royal Caribbean Cruises
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