Norwegian Cruise Line Holdings (NYSE:NCLH) were lifted in premarket trading on Tuesday by a better than expected Q3 report and optimistic guidance into 2023.
For the third quarter, a loss of $0.64 was $0.05 less than expected by analysts, while recovery in revenue to $1.62B also narrowly exceeded expectations. Occupancy also improved sequentially, to about 82% of pre-pandemic levels.
Into the final quarter of the year, occupancy is expected to be in the mid-to-high 80% range, garnering total revenue in the range of $1.4B to $1.5B, essentially in-line with consensus. The cruise line expects to generate positive adjusted free cash flow in the fourth quarter despite continued losses into the year-end.
“We are demonstrating continued positive momentum as we consistently reach key operational and financial milestones, including positive Adjusted EBITDA in the third quarter for the first time since the start of the pandemic,” CEO Frank Del Rio said. “The underlying fundamentals of our business and our target upmarket consumer remain strong and our strategy of focusing on maximizing long-term, sustainable profitability is working as intended, evidenced by our 2023 booked position which is equal to 2019’s record levels and at record pricing.”
On the topic of those booking trends for full year 2023, trends are expected to remain positive despite “significantly higher” pricing as compared to 2019. Shares of Norwegian Cruise Lines (NCLH) rose 2.46% in premarket hours.
Elsewhere, the company’s debt position worsened to a level of about $13.8B as compared to $13.2B in the second quarter.
“We are proactively working to further enhance our financial flexibility and liquidity, including the amendment and extension of our Operating Credit Facility which we expect to complete by year-end,” CFO Mark Kempa commented. “We believe our ongoing cash generation, buoyed by our attractive newbuild growth pipeline, provides a path to meet our near-term liquidity needs and restore our balance sheet over time.”
Dig into the company’s balance sheet.