NCLH Q3 2020 Earnings

Call Details

• Call Title: Norwegian Cruise Line Q3 2020 Earnings Call
• Date: November 10, 2020 at 5:00 AM UTC
• Management Team:
  • Andrea DeMarco (Senior Vice President of Investor Relations, Corporate Communications, and ESG)
  • Frank Del Rio (President and Chief Executive Officer)
  • Mark Kempa (Executive Vice President and Chief Financial Officer)

Call Summary

Financial Performance

• The company reported a U.S. GAAP net loss of approximately $677 million, or $2.50 per share, for Q3 2020.
• Cash and cash equivalents at quarter-end were approximately $2.4B as of September 30, 2020.
• During Q3 the company recorded approximately $450M of operating cash burn, about $200M of customer cash refunds, and a net working capital outflow of approximately $25M.
• Q3 average monthly cash burn came in at approximately $150M, representing an over 60% reduction in net cruise costs versus normalized levels.
• If vessels remained in layup at minimum manning, fourth quarter monthly cash burn was estimated at approximately $175M, driven primarily by timing of cash interest payments.
• The company expects to report a GAAP net loss for the fourth quarter and for the full year ending December 31, 2020.

Demand & Booking Trends

• Full year 2021 load factor is reported to be below historical ranges, primarily driven by weak occupancies in the first half of 2021.
• Second half of 2021 and into 2022 are described as being in line with historical ranges for occupancies.
• Approximately 60% of all 2021 bookings are from repeat guests, indicating strength in the core customer base.
• Oceania and Regent reported record opening-day booking results for specific promotions and world cruises, with high cash booking rates and strong new-to-brand demand.
• Approximately 50% of issued future cruise certificates (FCCs) have been redeemed to date, with brand-level redemption of nearly 50% on Norwegian, nearly 60% on Oceania, and approximately 75% on Regent Seven Seas.
• Bookings showed a noticeable uptick the day after the vaccine efficacy announcement, while the CDC conditional sailing order (issued late Friday) produced limited weekend booking response.