Norwegian Cruise Line (NCLH) Misses Q2 EPS by 52c
Norwegian Cruise Line (NYSE: NCLH) reported Q2 EPS of ($2.78), $0.52 worse than the analyst estimate of ($2.26). Revenue for the quarter came in at $16.9 million versus the consensus estimate of $25.48 million.
2020 Outlook
As a consequence of COVID-19, while the Company cannot estimate the impact on its business, financial condition or near- or longer-term financial or operational results with certainty, it expects to report a net loss on both a U.S. GAAP and adjusted basis for the third quarter ending September 30, 2020 and the year ending December 31, 2020.
The COVID-19 pandemic has had a significant impact on the Company’s financial position and results of operation. If the temporary suspension of sailings is further extended, the Company’s liquidity and financial position would likely continue to be impacted.
As of June 30, 2020, the Company had hedged approximately 80%, 52%, 36% and 13% of its total projected metric tons of fuel consumption for the remainder of 2020, 2021, 2022 and 2023, respectively. The following table provides amounts hedged and price per barrel of heavy fuel oil (“HFO”) which is hedged utilizing U.S. Gulf Coast 3% (“USGC”) and marine gas oil (“MGO”) which is hedged utilizing Gasoil.
| Remainder of 2020 | 2021 | 2022 | 2023 | |||||||||||
| % of HFO Consumption Hedged | 67 | % | 53 | % | 19 | % | 0 | % | ||||||
| Average USGC Price / Barrel | $ | 41.23 | $ | 46.09 | $ | 48.36 | N/A | |||||||
| % of MGO Consumption Hedged | 88 | % | 51 | % | 46 | % | 20 | % | ||||||
| Average Gasoil Price / Barrel | $ | 84.57 | (1) | $ | 80.61 | $ | 70.00 | $ | 67.45 | |||||
(1) Represents a blended rate that includes a $3.7 million benefit from 2020 Brent hedges that were replaced with Gasoil hedges in the third quarter of 2018.
Anticipated total capital expenditures for the remainder of 2020 are approximately $160 million, net of financing, once deferrals of newbuild related payments are finalized2. The Company is not providing capital expenditure guidance for future years at this time given the uncertain and evolving current environment. The impacts of COVID-19 on the shipyards where the Company’s ships are under construction, or will be constructed, have resulted in some delays in ship deliveries, and the impact of COVID-19 could result in additional delays in ship deliveries in the future, which may be prolonged.
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