Norwegian Cruise Line Holdings Ltd ( NCLH ) reported first-quarter fiscal 2024 sales growth of 20.3% year-on-year to $2.191 billion on 8% capacity growth, missing the consensus of $2.24 billion.

Operating income for the quarter was $218.39 million, compared to $10.72 million a year ago, and the margin expanded by 938 bps to 10%

Adjusted EPS improved to $0.16 from $(0.30) a year ago, beating the consensus of $0.11.

Adjusted EBITDA almost doubled to $463.99 million, and the margin expanded by 832 bps to 21.2%.

Occupancy for the quarter was 104.6%, and total revenue per Passenger Cruise Day increased ~8% YoY. Gross margin per Capacity Day was up 53% YoY. 

NCLH’s total debt was $13.7 billion. Net Leverage declined a full turn from December 31, 2023, ending the quarter at 6.3x.

Total cruise operating expenses increased to $1.39 billion versus $1.28 billion last year.

Gross Cruise Costs per Capacity Day were ~$300; Adjusted Net Cruise Costs, excluding Fuel per Capacity Day, were ~$165 (flat Y/Y when the $5 Dry-dock impact is excluded).

The company’s fuel expense was $198 million for the quarter; Fuel price per metric ton, net of hedges, decreased to $735 from $779 in 2023. Fuel consumption of 269,000 metric tons was slightly better than projections. 

At the end of the quarter, liquidity was $2.4 billion, consisting of $559.8 million of cash and cash equivalents, $1.2 billion of availability under the Revolving Loan Facility, and a $650 million undrawn backstop commitment.

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“We are pleased to report that we exceeded our guidance metrics for the first quarter of 2024. Thanks to robust consumer demand and continued success on our operational efficiency efforts, we are raising our 2024 full-year guidance for key metrics including Net Yield, Adjusted EBITDA and Adjusted EPS,” commented Mark A. Kempa, executive vice president and chief financial officer.

2024 Outlook: Norwegian Cruise Line ( NCLH ) expects Adjusted EPS of ~$1.32 (prior $1.23) versus consensus of $1.30 and expects Adjusted EBITDA of ~$2.25 billion (prior $2.2 billion).

The company expects 2024 occupancy of ~105.1%. Net Yield is expected to increase ~6.4% as reported and ~6.4% in Constant Currency YoY.

Q2 Outlook: NCLH expects adjusted EPS of about $0.32 against the consensus of $0.31 and Adjusted EBITDA of ~$555 million.

Price Action: NCLH shares are trading lower by 12.8% at $16.50 at the last check Wednesday.