Norwegian Cruise Line today reported results for the quarter ended September 30, 2011.
Operating income for the quarter improved 18.3% to $162.7 million from $137.6 million and Adjusted EBITDA increased 13.4% to $210.0 million from $185.2 million primarily driven by strong revenue performance across the fleet. Net Revenue grew 4.6% to $491.6 million from $469.8 million in 2010 mainly as a result of an increase in Net Yield of 3.8%, or 2.3% on a Constant Currency basis. The increase in Net Yield was driven by higher ticket pricing.
Benefits realized from ongoing business improvement initiatives coupled with non-recurring expenses in the third quarter of 2010 related to the launch of Norwegian Epic resulted in a decrease in Net Cruise Cost per Capacity Day of 2.0%, or 2.8% on a Constant Currency basis, after considering a 17.9% increase in the price of fuel to $598 per metric ton from $507 in 2010. Excluding fuel expense, Net Cruise Cost per Capacity Day decreased 5.3%, or 6.2% on a Constant Currency basis.
“A strong summer season resulted in solid top-line growth in the quarter,” said Kevin Sheehan, President and Chief Executive Officer of Norwegian Cruise Line. “Pricing was up across the fleet despite several voyages being impacted due to tropical weather conditions in the Northeast and Caribbean,” continued Sheehan.
Interest expense, net of capitalized interest, increased to $49.9 million in the quarter compared to $46.2 million in 2010 due to higher average interest rates in the period resulting from the issuance of $250 million in senior notes in November of 2010. Net income for the quarter improved to $110.2 million on revenue of $666.6 million compared to $93.0 million on revenue of $634.1 million in 2010.
Quarter Highlights and Updates
As a result of a successful naming contest, Norwegian Breakaway and Norwegian Getaway were selected from the more than 230,000 entries that were submitted. Norwegian Breakaway will be delivered in April 2013 followed by her sister ship, Norwegian Getaway, in April 2014. Sheehan commented on the naming of the vessels, “Both ‘Breakaway’ and ‘Getaway’ capture the essence of a Freestyle Cruising vacation on a Norwegian ship, one that allows our guests to escape the stress of everyday life and enjoy an experience that is tailored to their wishes.”
Soon after the announcement of the ship names, the first steel was cut for Norwegian Breakaway at Meyer Werft in Papenburg, Germany, marking the ceremonial beginning of construction. Plans and renderings for all stateroom categories, from the popular Studio single cabins to the luxury suites in The Haven by Norwegian, have been revealed and are receiving rave reviews.
In early October, at an event in New York City hosted by Mayor Michael Bloomberg, the Company announced the homeport, inaugural summer itinerary and hull artist for Norwegian Breakaway. Hailed by Mayor Bloomberg as a major coup for the city, Norwegian Breakaway will homeport year-round in New York City beginning in May 2013, initially sailing seven-day voyages to Bermuda. And furthering her ties to New York, the Company announced that famed pop artist and New York resident Peter Max will be designing the signature hull art for Norwegian Breakaway.
“Norwegian Breakaway will bring an incredible cruising experience to the doorstep of one of the world’s largest and most vibrant metropolitan areas. Guests on board Norwegian Breakaway, whether local New Yorkers or visitors from out of town, will be amazed by her incredible offerings and luxurious accommodations,” said Sheehan.
On the heels of the Norwegian Breakaway announcement in New York, the Company launched its newest and most ambitious brand platform and national advertising campaign to date, inviting the public to “Cruise Like a Norwegian.” The multi-faceted rollout expands the Company’s presence on television, digital and social media.
Commented Sheehan, “The introduction of our exciting new brand platform is a significant milestone. After four years of hard work improving our product and cultivating our brand, we felt this is the right time to issue this bold invitation to cruise with us by piquing interest and creating excitement around our brand. We believe this new brand platform will differentiate us and help clearly define a Norwegian cruise as one of the best vacations. I’m incredibly excited about the launch of our new campaign which not only expresses the various ways to enjoy a vacation on a Norwegian cruise, from dining like a Parisian to surfing like a Hawaiian, but also expands the way we engage and interact with our guests.”