Resurgence: NCL Reports Record Second-Quarter Net Income


Norwegian Cruise Line reported its second-quarter earnings on Tuesday and the news was good. The company's net income in 2009 rose to $15.4 million on revenue of $478.4 million, compared to a net loss of $27 million on revenue of $525 million in 2008, despite a decline in net revenue in the second quarter of 9.3 percent.

This decline resulted from a 7.7 percent decrease in net yield and a 1.8 percent decrease in capacity days. Reason? The decrease in net yield was blamed primarily on continued weakness in passenger ticket pricing versus 2008, while the decrease in capacity days resulted from the departure of Norwegian Dream from the fleet in November of 2008.

Net cruise cost per capacity day also slipped 20.5 percent in the second quarter compared to the same time last year, attributed to lower fuel costs across the fleet and lower crew payroll costs per capacity day primarily due to cost savings from the re-flagging of Pride of Hawaii and Pride of Aloha from the U.S.-flagged fleet. For the quarter, average fuel costs decreased 38.2 percent.

"I am very pleased with our performance this quarter especially given the current economic climate," said Kevin Sheehan, CEO of Norwegian Cruise Line. "Despite the weakness in ticket pricing, we are continuing to achieve improvements in our earnings and have begun to demonstrate consistency in our performance. Our continuing razor focus on all aspects of our operation, from revenue management to shipboard and shoreside operations, has resulted in record-setting EBITDA for the quarter and an enormous turnaround from our performance just a year ago."

NCL says the remainder of 2009 looks good in terms of bookings, though ticket prices are tracking below last year.

NCL's next generation Freestyle Cruising ship, Norwegian Epic, was recently floated out of  dry-dock and its interiors are now being outfitted. "Sailings through April 2011 are open for sale and the response from the public has been very positive to date," Sheehan said.

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