Norwegian Cruise Line today reported results for the quarter ended June 30, 2012.
Improved revenue performance in the quarter coupled with business improvement initiatives resulted in a 14.1% increase in operating income to $87.0 million along with an 8.6% increase in Adjusted EBITDA to $135.1 million. Net Revenue increased 2.7% in the quarter due to an improvement in Net Yield and a 1.5% increase in Capacity Days. Net Yield increased 1.2% (1.9% on a Constant Currency basis) as a result of higher average ticket pricing.
Net Cruise Cost per Capacity Day decreased 1.3% (0.9% on a Constant Currency basis) as benefits from business improvement initiatives and efficiencies coupled with the timing of repairs and maintenance expense more than offset a 15% increase in the per metric ton cost of fuel to $684. Excluding fuel expense, Net Cruise Cost per Capacity Day decreased 5.1% (4.5% on a Constant Currency basis). “Our financial results for the quarter demonstrate healthy top line growth, albeit moderated by the impacts from pressures surrounding Europe. As expected, our deployment, which includes a record four ships in Europe, benefited the top line through higher ticket revenue with a slight offset in onboard spend,” said Kevin Sheehan, President and CEO of Norwegian Cruise Line. “And the benefits from business improvement initiatives not only contributed to our financial results, but also to our ongoing commitment in improving the experience of our guests,” continued Sheehan.
Interest expense was $48.9 million compared to $46.7 million in 2011 reflecting a write-off of $2.4 million of deferred financing fees in 2012. The Company posted a 23.3% increase in net income to $36.0 million on revenue of $583.2 million from $29.2 million on revenue of $568.6 million in 2011.
Progress on Norwegian Breakaway, the Company’s newest ship currently under construction at Meyer Werft, continued to gain momentum throughout the quarter. In early May, the keel was laid, marking the start of the ship’s construction. Recently, the Company announced Norwegian Breakaway’s extraordinary entertainment line-up, full of hit Broadway shows headlined by the 80’s-inspired rock musical ROCK OF AGES which is joined by ballroom dance sensation BURN THE FLOOR and the spectacular CIRQUE DREAMS & DINNER JUNGLE FANTASY. The line-up also includes improvisational troupe The Second City and the popular dueling pianos of Howl at the Moon at Headliners Comedy Club while Fat Cats Jazz & Blues Bar will play host to a Norwegian Cruise Line favorite and New Yorker Slam Allen.
As the largest vessel to ever homeport year-round in New York City, Norwegian Breakaway has many elements of New York incorporated into its offerings. The hull art design was conceived by celebrated New York-based artist Peter Max and further strengthening her ties to the Big Apple, Norwegian enlisted famed New York-based celebrity chef Geoffrey Zakarian to create and oversee our first seafood-centric dining venue, Ocean Blue by Geoffrey Zakarian. Commenting on Norwegian Breakaway, Sheehan stated, “Our goal is to make Norwegian Breakaway New York’s ship and the first choice when cruising from this great city. New Yorkers are accustomed to the best, and by enlisting authentic Broadway entertainment such as Rock of Ages and partnering with acclaimed chef Geoffrey Zakarian on Ocean Blue, I’m positive that anyone looking for a taste of New York will feel right at home on Norwegian Breakaway.”
Also during the quarter the first steel cutting for Norwegian Getaway was held in conjunction with Norwegian Breakaway’s keel laying. Homeporting year-round in Miami,
Norwegian Getaway will give Norwegian a strong foothold in the world’s most popular cruise port. Also homeporting year-round in Miami is Norwegian Sky, which the Company recently exercised its option to purchase. Sailing three and four-night cruises from Miami to the Bahamas, Norwegian Sky is vital to Norwegian’s fleet as the premier short cruise product in Miami. Said Sheehan, “Along with New York, it is critically important that we maintain a strong foothold in Miami. By homeporting Norwegian Getaway in Miami and taking full ownership of Norwegian Sky, we are demonstrating our continued commitment to being the cruise line of choice in the cruise capital of the world.”