NCLH Q3 2022 Earnings

Call Details

• Call Title: Norwegian Cruise Line Q3 2022 Earnings Call
• Date: November 8, 2022 at 3:00 PM UTC
• Management Team:
  • Frank Del Rio (President and Chief Executive Officer)
  • Mark Kempa (Executive Vice President and Chief Financial Officer)
  • Jessica John (Vice President of Special Relations, ESG, and Corporate Communications)

Call Summary

Financial Performance

• Company reported positive adjusted EBITDA of approximately $28M in Q3 2022, which was the first positive adjusted EBITDA since the pandemic began.
• Operating cash flow was generated for the first full quarter since the start of the pandemic in the prior quarter and continued momentum into Q3.
• Total revenue per passenger cruise day in Q3 2022 was approximately up 14% versus 2019, outperforming the company's expectation for a high single-digit increase.
• Load factor improved 17 percentage points sequentially to approximately 82% in Q3 2022, which was in line with company guidance.
• Advanced ticket sales (ATS) balance was $2.5B at quarter end, with a gross ATS bill of $1.5B and approximately $1.6B of ATS associated with bookings in the final payment window.
• Overall liquidity totaled approximately $2.2B at quarter end, comprised of approximately $1.2B of cash and a $1.0B undrawn commitment.

Guidance

• Company expects load factors to continue improving sequentially to the mid-to-high 80% range in Q4 2022 despite seasonal softness.
• Company expects the occupancy gap versus 2019 to narrow from approximately 30% below in Q3 to about 20% below in Q4 2022, with normalized 100%+ historical load factors targeted beginning in Q2 2023.
• Total revenue per passenger cruise day is expected to increase by approximately 20% in Q4 2022 versus 2019 levels.
• Company expects adjusted free cash flow to be achieved in Q4 2022 as the next step following positive adjusted EBITDA.
• Full-year 2023 book position is equal to 2019's record performance and the ongoing net booking pace is characterized as being at the level needed to sail full beginning in Q2 2023.
• Additional forward-looking metrics such as capacity days, revenue expectations, depreciation and amortization, interest expense, fuel consumption, and capital expenditures were provided in the investor presentation and earnings release.