Norwegian Cruise Line Reports Q2 2010 Results

Norwegian Cruise Line's EBITDA for the second quarter of 2010 (ended 30 June 2010) improved 12.6% to $94.7 million versus $84.2 million for the same period in 2009 (a 12.1% increase on an adjusted basis, to $95.7 million from $85.4 million).

An improvement in Net Yield of 6.6% in the quarter resulted in Net Revenue increasing to $364.7 million from $353.9 million despite a 3.3% decrease in Capacity Days in the quarter due to the departure of Norwegian Majesty from the fleet in October 2009. The increase in Net Yield came from both improved passenger ticket pricing and increased onboard revenue per Capacity Day.

Occupancy Percentage for the quarter was 109.2% while the Net loss for the quarter was $14.9 million on revenue of $477.9 million compared to net income of $15.4 million on revenue of $478.4 million in 2009. The net loss in 2010 included a non-recurring charge of $33.1 million related to foreign exchange contracts associated with the financing of Norwegian Epic. Excluding this non-recurring charge, net income for the period was $18.2 million.

Net Cruise Cost for the second quarter was essentially flat year over year. On a per Capacity Day basis, Net Cruise Cost increased 3.5% primarily due to higher average fuel costs in the period and fewer capacity days as a result of the departure of Norwegian Majesty. Average fuel cost per metric ton in the period climbed to $508 in 2010 from $356 in 2009. Net Cruise Cost Excluding Fuel per Capacity Day decreased 2.3%.

"The results for the quarter demonstrate that we are continuing to build momentum," said Kevin Sheehan, chief executive officer of Norwegian Cruise Line. "Our improved results over last year were achieved while absorbing a 43% increase in the price of fuel."

Interest expense, net of capitalized interest, increased to $37 million in the quarter compared to $26.6 million in 2009 due to higher average interest rates in the period. Other expense increased to $33.8 million in 2010 versus $4.3 million in 2009 primarily due to the aforementioned loss on foreign exchange contracts.

NCL has indicated that the second half of 2010 is showing solid improvements in pricing from 2009 levels with load factors consistent with prior year. Unlike this same time last year, the company has been successful at holding price while balancing load factor and the booking curve continues to be healthy, but has narrowed from the highest levels achieved in the first quarter of 2010.

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