Norwegian Cruise Line reported a first-quarter loss of $1.9 billion, with the impact of a coronavirus-enforced suspension of sailings exacerbated by a $1.6 billion write-down in goodwill.
However, Norwegian Cruise Line insisted it is now “well-positioned” to withstand even 18 months of suspended operations after raising $2.4 billion in funds in early May.
Norwegian Cruise Line president and chief executive officer Frank Del Rio said: “We’ve taken decisive action to strengthen our financial position, including our highly successful and oversubscribed $2.4 billion capital raise announced last week.
“We believe this, coupled with other liquidity-enhancing initiatives, makes us well-positioned to weather an unlikely scenario of over 18 months of suspended voyages.”
Del Rio added: “We continue to experience demand for voyages in the future across our three brands.
“As we prepare to resume sailings, we’re working alongside US and global public health agencies and governments to develop and implement enhanced cruise health and safety standards.”
He reported “demand for cruise vacations particularly beginning in the fourth quarter of 2020, accelerating through 2021”.
Norwegian described overall bookings and pricing for 2021 as “within historical ranges”.
The cruise line noted all three of its brands had begun the year “in a record booked position and at higher prices” than last year despite a 7% increase in capacity.
However, it reported “slightly over half of guests” had declined to rebook or accept cruise credits in place of cash refunds for cancelled cruises despite being offered “typically 125% of the cruise fare paid.
The company’s credits are valid through to the end of December 2022.
Norwegian revealed it had $1.8 billion of advance ticket sales at the end March, of which $800 million were for cancelled voyages to the end of June and $370 million for voyages scheduled for the second half of this year.
The company said it continues to take bookings for later this year, 2021 and 2022, and to receive new deposits and final payments.
Norwegian reported it has pared its operating costs to between $70 million and $110 million per month while voyages are suspended, following a series of cost-cutting measures.
Additional capital-spending reductions and deferred debt payments mean its monthly cash burn has been reduced to between $120 million and $160 million per month.
However, this excludes cash refunds to customers.
Norwegian noted it had debts totalling $8.6 billion at the end of March, with available cash and cash equivalents of just $1.4 billion.
However, a series of capital markets transactions launched on May 5 had raised $2.4 billion, including a $400 million investment by US private equity firm L Catterton.
Norwegian Cruise Line chief financial officer Mark Kempa said: “Our swift actions to preserve cash and secure additional liquidity provide a strong foundation to withstand the operational and financial impact of Covid-19.
“We are confident the company can navigate through an unlikely extended zero-revenue scenario and emerge in a strong position.”
