NCLH Q3 2023 Earnings

Call Details

• Call Title: Norwegian Cruise Line Q3 2023 Earnings Call
• Date: November 1, 2023 at 2:00 PM UTC
• Management Team:
  • Harry Sommer (President and Chief Executive Officer)
  • Mark Kempa (Executive Vice President and Chief Financial Officer)
  • Jessica John (Chief Strategy Officer, Region 7C Cruises
  • Vice President, Investor Relations (interim))
  • Sarah Inman (Head of Investor Relations and Corporate Communications)

Call Summary

Financial Performance

• Third quarter revenue was $2.5B, an increase of 33% versus the same period in 2019.
• Load factor in Q3 was 106% versus 2019 comparables, reflecting strong close-in demand dynamics.
• Net per diems increased nearly 8% versus 2019, and net yield increased approximately 3% versus 2019, both at the high end of guidance.
• Adjusted net cruise costs excluding fuel per capacity day were $152 in Q3, in line with guidance and reflecting the third consecutive quarter of unit cost improvement.
• Adjusted EBITDA for Q3 was approximately $752M, which beat guidance by about $22M.
• Adjusted EPS for Q3 was $0.76, beating projections by $0.06.

Guidance

• Fourth quarter guidance projects net per diem growth of approximately 15% to 16% versus 2019.
• Fourth quarter guidance stated net yield growth of approximately 75% to 875% as presented on the call, which is inconsistent with typical yield ranges and requires clarification.
• Adjusted net cruise cost excluding fuel per capacity day is expected to be approximately $151 in Q4, with a normalized unit cost of about $153 after accounting for shifted non-recurring items and inaugural costs.
• Fourth quarter adjusted EBITDA is projected at approximately $360M and adjusted EPS is projected to be a loss of approximately $0.15 on a diluted share count of ~425M.
• Full-year 2023 adjusted EBITDA outlook is approximately $1.86B, within the prior range of $1.85B to $1.95B despite Q4 headwinds.
• Full-year 2023 adjusted EPS was revised to approximately $0.73 from prior guidance of $0.80, representing a downward change explicitly referenced on the call.