Norwegian Cruise Line Holdings Issues Business Outlook, Booking Intel

Norwegian Cruise Line Holdings provided a business update to the U.S. Securities & Exchange Commission (SEC) today, talking about the impacts of COVID-19 and the company's continued resumption of cruise operations.

Resuming Cruises

NCLH said that during the third quarter 2021, it began a phased relaunch of certain cruise voyages with ships initially operating at reduced occupancy levels. By the end of the third quarter, the company was operating vessels that constituted approximately 40 percent of its company-wide berth capacity.

Starting in December 2021, NCLH said the spread of the Omicron variant of COVID-19, with its increased transmissibility, caused several operational challenges and disruptions, including new travel restrictions and increased protocols in ports of call.

That limited port availability led to cancellation of certain voyages in both fourth quarter 2021 and first quarter 2022. That also resulted in postponement of the restart of certain vessels.

Currently, 16 of NCLH's total fleet of 28 ships (70 percent of its berth capacity) is operating with guests on board. That total excludes a vessel paused from service beginning in December 2021 due to the cancellation of its South Africa and related itineraries; NCLH said that was a result of travel restrictions and other operational challenges due to the Omicron variant.

Good news? In its press release, the company said that "we expect to have approximately 85 percent of berth capacity operating by the end of the first quarter of 2022" It also said that " the full fleet [is] expected to be back in operation during the early part of the second quarter of 2022."

CDC Voluntary Program

On January 14, 2022, NCLH announced that its three brands had opted into the U.S. Centers for Disease Control and Prevention’s (CDC) "COVID-19 Program for Cruise Ships Operating in U.S. Waters."

That's the CDC's voluntary COVID-19 risk mitigation program for foreign-flagged cruise ships operating in U.S. waters. NCLH said it's awaiting the release of additional information from the agency. 

In today's filing, the cruise company also said that its SailSAFE Global Health and Wellness Council, chaired by Dr. Scott Gottlieb, former head of the U.S. Food and Drug Administration, continues to advise the company on health and safety protocols in light of advancements in medicine and technology.

Booking Environment and Outlook

NCLH assessed the booking environment as follows:

  • Net booking volumes at the start of fourth quarter 2021 continued to demonstrate week-over-week sequential growth after the slowdown in booking activity caused by the Delta variant of COVID-19.
  • Net booking volumes in the later part of that fourth quarter, though, were negatively impacted by the Omicron variant of COVID-19, primarily for close-in voyages in the first and second quarters of 2022.
  • In recent weeks, net booking volumes have continued to improve sequentially

 As a result of the impacts from Omicron, as of February 6, 2022, NCLH said:

"Cumulative booked position for the first half of 2022 is below the extraordinarily strong levels of 2019. The second half of 2022, when the full fleet is expected to be back in operation, is in line with the comparable 2019 period."

On the pricing front, NCLH reported that pricing for the first half, second half and full year 2022 are above the record levels for the same time in 2019, even when including the dilutive impact of future cruise credits.

One highlight? NCLH said: "Booking trends for 2023 demonstrate continued strong demand for sailings in the medium and longer term with booked position and pricing meaningfully higher and at record levels when compared to 2019."

Liquidity and Financial Action Plan

"We continue to take proactive measures to enhance liquidity and financial flexibility in the current environment," NCLH's press release stated. 

As of September 30, 2021, the company's total debt position was $12.4 billion and its liquidity, consisting of cash and cash equivalents and short-term investments, was $1.9 billion.

The company then outlined actions it had taken to enhance its liquidity and financial flexibility since September 30, 2021. Among several steps mentioned was a $1 billion commitment,available to NCLH through August 15, 2022, if needed. But, the company also said it hasn't drawn on that and doesn't intend to at this time. 

Cash Burn

NCLH's monthly average cash burn for the fourth quarter of 2021 was approximately $345 million, slightly lower than its prior estimate for that quarter.

The cash burn rate includes ongoing ship operating expenses, administrative operating expenses, interest expense, taxes, debt deferral fees and non-new-build capital expenditures. The cash burn rate excludes cash refunds of customer deposits as well as cash inflows from new and existing bookings, new-build related capital expenditures and other working capital changes.


With a combined fleet of 28 ships with nearly 60,000 berths, NCLH's brands sail to more than 490 destinations worldwide. In addition, the cruise company has nine additional ships scheduled for delivery through 2027, comprising approximately 24,000 berths.

In today's SEC filing and related press release, NCLH said the following about its financial outlook: "While we cannot estimate the impact of the COVID-19 pandemic on our business, financial condition or near- or longer-term financial or operational results with certainty, we will report a net loss for the fourth quarter and full year ending December 31, 2021."

The company also said it expects to report a net loss until it's able to resume regular voyages.

However, "as a result of Omicron variant-related impacts to operations in the first quarter of 2022, we now expect net cash provided by operating activities to be positive during the second quarter of 2022," the company said.

Most notably, NCLH said: "Despite the impact of the Omicron variant on the booking environment, and based on our current projections and market and public health conditions, we expect to have positive adjusted net income for the second half of 2022.

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