Norwegian Cruise Line posts first annual profit since 2019

Norwegian Cruise Line Holdings is back in the black after years of losses since the pandemic. NCLH cruised to its first full-year profit since 2019 with net income of $166.2 million. Combined revenue was $8.5 billion, a nearly one-third increase in 2019.

Cost-Cutting Successes

The Norwegian Gem cruise ship docked in the port of Jacksonville, ready to start service amidst the picturesque backdrop of the city.

Total revenue per passenger cruise day increased by about 17%. The company cited its focused margin enhancement measures to drive down costs amid strong demand and revenue growth.

It made progress in optimizing fuel consumption and bringing down overall costs. The adjusted net cruise costs, excluding fuel, dropped by 21% compared to 2022. “Throughout the year, we successfully implemented measures to rightsize our cost base,” said NCLH chief financial officer Mark A. Kempa.

The company saw a slight occupancy decline in the fourth quarter to below 100% due to the Middle East regional conflict. It canceled or diverted all Q4 calls in the region.

However, Hawaii cruise demand has recovered following the Maui wildfires. NCL’s Pride of America is the only domestic-flagged cruise ship exclusively sailing Hawaii island itineraries.

Scheduled cruises to the Middle East represent about 4% of capacity this year. In 2023, NCLH took delivery of three ships, Oceania Cruises’ Vista, Norwegian’s Viva, and Regent’s Seven Seas Grandeur, the most ever in a single year.

Outlook for 2024

regent seven seas cruise ships by size

NCLH started 2024 at record levels for booked positions and pricing. Group brands NCL, Oceania Cruises, and Regent Seven Seas Cruises are all seeing ‘exceptional demand’ for 2024. It projects full-year occupancy for 2024 at around 105%.

“We are determined to take advantage of the positive momentum and strong demand for cruise,” CEO Harry Sommer said. “Demand is certainly as robust as we have ever seen.” It expects net yield growth to be at around 5.4% in 2024. As of the 2023 year-end, the company had a total net debt of $13.7 billion.

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