NCLH Q3 2021 Earnings

Call Details

• Call Title: Norwegian Cruise Line Q3 2021 Earnings Call
• Date: November 3, 2021 at 2:00 PM UTC
• Management Team:
  • Jessica John (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 operating fleet produced positive cash flow in Q3 despite self-imposed occupancy caps and reduced operations.
• Occupancy in Q3 was approximately 57%, which management stated was in line with expectations for the phased resumption.
• The company reported an average monthly cash burn of approximately $275M in Q3, which was below prior guidance of $285M.
• Operating cash burn in the quarter was approximately $825M, which included OpEx, SG&A, interest, and CapEx.
• Customer cash refunds during the quarter were approximately $115M, while net working capital and other inflows were approximately $125M.
• Advanced ticket sales increased approximately $500M on a gross basis in the quarter, representing an approximately 65% increase versus the prior quarter's build.

Guidance

• The company continues to expect full fleet operation by April 1, 2022 and a return to normalized occupancy no later than the beginning of Q3 2022.
• The company expects operating cash flow to turn positive toward the tail end of Q1 2022 and expects to return to profitability in the second half of 2022.
• For Q4 the company expects average monthly cash burn to increase to approximately $350M as restart expenses and vessel reentries ramp.
• Slides referenced in the presentation provide model inputs for depreciation and amortization, interest expense, fuel consumption, and CapEx, but specific numeric guidance for these items was not disclosed on the call.
• The company stated it will keep price discipline and will not sacrifice yield to chase short-term occupancy gains in transitional quarters.
• Management plans to provide more color on cost outlook on the next earnings call as 2022 planning is fine-tuned.