NORWEGIAN Cruise Line Holdings (NCLH) has posted disappointing first quarter results, missing its estimates for revenue and profit, while warning of weak consumer spending.
Revenue declined 3% to US$2.13 billion from one year earlier, with NCLH saying it is expecting annual net yields below the prior stated range of a 3% increase, instead anticipating a result of around 2%.
Adjusted EBITDA declined 2% to US$453 million compared to US$464 million last year, while adjusted EPS fell to US$0.07, slightly below guidance due to currency losses of US$0.05.
The company maintained its annual profit forecast of US$2.05 per share and said bookings for the 12-month period were softening but remained within the optimal range.
NCLH forewarned of weak spending on its premium voyages with Regent Seven Seas Cruises and Oceania Cruises, in part due to growing concerns of a possible recession in the United States.
The company also saw pressure from increased investments related to ship maintenance, more dry docks, and new fleet expansions, as the company expects to take delivery of eight new vessels over the next 11 years (CW 09 Apr 2024).
“We are seeing consumers just get a little bit tighter in terms of their willingness to take a longer haul vacation, i.e Europe at this stage versus closer to home where we’re seeing continued strong demand,” Chief Financial Officer Mark Kempa told Reuters.
President & Chief Executive Officer Harry Sommer believes the company’s cost-cutting measures will allow it to manage macroeconomic factors.
“While we recognise there may be potential pressures on the top line, we believe these can be effectively offset by the continued execution of our cost savings initiatives,” he said.
“Our focus remains on managing the business for the long term – balancing disciplined pricing and cost control with guest experience and strategic investments for the future.” MS