Miami-based cruise company Norwegian Cruise Line Holdings reported a rise in its third quarter earnings, despite disruptions caused by an active hurricane season during the period.
NCL delivered a net income of USD 400.6 million in the three months ended September 30, against a net income of USD 342.3 million reported in the same quarter a year earlier.
Revenue increased to USD 1.65 billion for the period from USD 1.48 billion seen in the third quarter of 2016, mainly due to a 9.1% increase in capacity days driven by the delivery of Norwegian Joy, which entered service in late June, along with an increase in net yield due to strength in ticket pricing and higher onboard and other revenue.
“Strong operational performance across our core markets, bolstered by strength in European itineraries, where pricing has now exceeded the previous high watermark of 2015, drove third quarter revenue and yield growth well ahead of expectations, despite the disruptions caused by weather-related events during the quarter,” Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings, said.
For the nine months ended September 30, the company’s net income stood at USD 661 million, compared to a net income of USD 560.8 million seen in the same period a year earlier, while revenue reached USD 4.14 billion, up from USD 3.74 billion seen in the first nine months of 2016.
“Over the last several weeks we have seen consumer demand continue to accelerate for Caribbean sailings and booking volumes have now reached pre-hurricane levels,” Del Rio added.
The company said that its booked position for full year 2018 remains well ahead in both load and price compared to prior year across all three of its brands.
As part of ongoing efforts to deleverage and reduce interest expense, the company redeemed all of its outstanding 4.625% Senior Notes due 2020 in October and amended its existing senior secured credit facilities by increasing and repricing its USD 750 million revolving credit facility and repricing the approximately USD 1.41 billion principal amount outstanding under its term loan A facility.
In addition, the company added a new USD 375 million term B loan facility due 2021, which bears interest at LIBOR plus an applicable margin of 1.75%. The proceeds from the New Term B Loan Facility and cash on hand were used for the notes redemption.
“We continue to focus on further strengthening our balance sheet as evidenced by the success of our recent refinancing transaction. We are now within our targeted leverage range of three to four times with further meaningful deleveraging expected in 2018 and beyond,” Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings, said.