NCL Reports 8.6 Percent Rise in Third-Quarter Profits

Norwegian Cruise Line reported third-quarter profits of $93 million, an 8.6 percent increase over $85.6 million in the same period last year. Revenue was $634.1 million, compared to $550.7 million in third-quarter 2009. EBITDA for the third quarter improved 21.4 percent to $184.1 million versus $151.6 million for the same period in 2009.

The addition of Norwegian Epic to the fleet in June, together with a 9.5 percent improvement in net yield, resulted in net revenue increasing to $469.8 million from $390 million in the same period in 2009. The increase in net yield was a result of both improved passenger ticket pricing and increased onboard revenue per capacity day.

Capacity days increased 10.1 percent with the addition of Norwegian Epic, which started regular service in mid-July, partially offset by the departure of Norwegian Majesty from the fleet in October 2009. Occupancy percentage for the quarter was 113.2 percent versus 114.8 percent in 2009 with the slight decrease attributable to the initial phase-in period of Norwegian Epic.

Net cruise cost per capacity day increased 8.9 percent primarily due to initial start-up costs related to the introduction of Norwegian Epic (which included inaugural events and advertising and promotion expenses), timing differences of maintenance and repair expenses including dry-dock costs, and a 13.9 percent increase in the average cost of fuel to $507 per metric ton in 2010 from $445 per metric ton in 2009.

“Both improved ticket pricing across our fleet and the introduction of Norwegian Epic into regular service contributed to our strong results for the quarter,” said CEO Kevin Sheehan. “Our 21 percent improvement in EBITDA was achieved despite one-time costs related to Norwegian Epic’s startup and inaugural activities, as well as an increase in the price of fuel. We continue to keep a razor-sharp focus on our cost discipline and containment measures.”

NCL on Oct. 25 announced an agreement to build two new 4,000-passenger vessels for delivery in the spring of 2013 and 2014 at an aggregate contract price of approximately €1.2 billion. The ships will include signature elements from the current fleet, including many from the Norwegian Epic. This is the company’s first order for new vessels since 2006 and marks a return to a longstanding relationship with Germany’s Meyer Werft shipyard.

Shortly after reporting its third quarter results, NCL also said it had filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to a proposed initial public offering of its ordinary shares. The registration statement relating to these securities has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

The offering will be made only by means of a prospectus, when available. NCL said it intends to use the net proceeds received from the IPO to pay down a certain amount of its $750 million senior secured revolving credit facility, to fund future capital expenditures and for general corporate purposes. NCL is currently owned by Genting HK (50 percent), Apollo Funds (37.5 percent) and TPG Viking Funds (12.5 percent).