Norwegian Cruise Line reported that it saw higher than expected earnings in its first financial quarter for 2015, and provided guidance for the second quarter and rest of the year.
The line saw an improvement in Adjusted EPS of 17.4 percent to $0.27 on Adjusted Net Income of $62.6 million. These earnings exceeded the company’s guidance of $0.20 to $0.24 per share, benefiting from lower than expected interest expense and an improvement in anticipated Net Yield performance.
An Adjusted Net Yield increase of 18.9 percent was driven by the addition of the upper premium Oceania Cruises and luxury Regent Seven Seas Cruises brands in the fourth quarter of 2014. On a Combined Company basis, which compares current results against the combined results of Norwegian and Prestige Cruise Holdings in 2014, the Adjusted Net Yield was down 0.7 percent and flat on a Constant Currency basis compared to last year’s first quarter.
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased by 28.7 percent, while on a Combined Company basis increased by 5.6 percent. Norwegian’s fuel price per metric ton decreased to $526, an 18.2 percent change from $643 in 2014.
With the integration of Norwegian and Prestige Cruise Holdings operations nearly complete, continued synergy identification efforts are estimated to lead to $75 million for 2015, comprised of $30 million in revenue and $45 million in cost synergies.
The company had previously anticipated $15 million in revenue and $25 million in cost synergies for a total of $40 million for 2015. Currently, Norwegian Cruise Line is earmarking $20 million for reinvestment directed to business initiatives aimed at driving demand to its three brands and resulting in net synergies of $55 million.
For the full year 2016, the company has identified synergies of $115 million.