Norwegian Cruise Line Reports Q3 2022 Earnings; Net Loss

Norwegian Prima

Norwegian Cruise Line Holdings reported financial results for the third quarter ended September 30, 2022 and provided a business update.


  • GAAP net loss of $(295.4) million or EPS of $(0.70) and Adjusted Net Loss of $(268.3) million or Adjusted EPS of $(0.64).
  • Reached positive Adjusted EBITDA milestone in the third quarter of 2022.
  • Sequential Occupancy improvement to approximately 82% in the quarter, consistent with guidance.
  • Total revenue per Passenger Cruise Day exceeded expectations, increasing approximately 14% in the third quarter of 2022 compared to the same period in 2019.
  • On track to generate positive Adjusted Free Cash Flow in the fourth quarter of 2022.
  • 2023 cumulative booked position equal to record 2019 levels at significantly higher pricing.
  • Reaffirm expectation for record Adjusted EBITDA and record Net Yield for FY 2023.

“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. 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,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings.

“We believe we are uniquely positioned within the cruise space to unlock value for our stakeholders given our dominance as the leading operator in upscale experiences, our sizeable yet nimble 29-ship fleet, our industry-best growth profile and our differentiated go-to-market strategy of market-to-fill and value-add bundling.”

Operations Update

The company continued its phased ramp-up in the third quarter focusing on maximizing long-term pricing, which resulted in a 17-point improvement in Occupancy to approximately 82%, consistent with previously outlined expectations. The company continues to expect quarterly Occupancy levels to increase and reach historical levels for the second quarter of 2023. Given fourth quarter Occupancy is typically lower due to seasonality, we expect Occupancy to be in the mid-to-high 80 percent range, but with the gap versus 2019 levels expected to further narrow.  

The company said that strong ticket pricing and onboard revenue generation resulted in better-than-expected total revenue per Passenger Cruise Day which was up approximately 14% in the third quarter of 2022 versus 2019, higher than guidance for a high-single digits increase and despite the impact of the Russia-Ukraine conflict on premium-priced Baltic itineraries. For the fourth quarter of 2022, the company expects total revenue per Passenger Cruise Day to increase approximately 20% versus 2019.

The company reached another significant financial inflection point by generating positive Adjusted EBITDA of approximately $28 million for the third quarter of 2022. The company continues to target positive Adjusted Free Cash Flow for the fourth quarter of 2022 and slightly positive Adjusted EBITDA for the second half of 2022. In addition, the company continues to target exceeding historical record Net Yield and Adjusted EBITDA levels for full year 2023 and a return to Adjusted Net Income in 2023.

Booking Environment and Outlook

As expected, the company’s current cumulative booked position for the fourth quarter of 2022 is below the comparable 2019 period but at higher prices even when including the dilutive impact of future cruise credits (“FCCs”). Dilution from value-add FCCs issued during the pandemic will not carry over into 2023 as the bonus portion of these FCCs expire at year-end 2022.

Booking trends for full year 2023 remain positive with cumulative booked position equal to record 2019 levels inclusive of the company’s increase in capacity. Pricing is significantly higher than that of 2019 at a similar point in time for full year 2023. Net booking volumes continue to be at the pace needed to reach historical Load Factor levels in 2023.

As of September 30, 2022, the company’s advance ticket sales balance, including the long-term portion, was $2.5 billion. This includes approximately $260 million of FCCs or approximately 10% of the total deposit balance. Approximately 60% of the FCC balance outstanding has been applied to future sailings. Gross advance ticket sales build was approximately $1.5 billion during the quarter, in line with the prior quarter.

Liquidity and Financial Recovery Plan

The company continues to prioritize enhancing liquidity and financial flexibility in the current environment while seeking opportunities to optimize its balance sheet and reduce leverage. As of September 30, 2022, the company’s total debt position was $13.9 billion and the company’s liquidity was approximately $2.2 billion, consisting of cash and cash equivalents of $1.2 billion and a $1 billion undrawn commitment.

“We are on track to generate positive Adjusted Free Cash Flow in the fourth quarter as we continue to march towards our expected return to historical occupancy levels beginning in the second quarter of 2023,” said Mark A. Kempa, executive vice president and chief financial officer.

“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. 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.”

Third Quarter 2022 Results

GAAP net loss was $(295.4) million or EPS of $(0.70) compared to net loss of $(845.9) million or EPS of $(2.29) in the prior year. The company reported Adjusted Net Loss of $(268.3) million or Adjusted EPS of $(0.64) in 2022. This compares to Adjusted Net Loss and Adjusted EPS of $(801.4) million and $(2.17), respectively, in 2021.

Revenue increased to $1.6 billion compared to $153.1 million in 2021 due to the phased ramp up of cruise voyages.

Total cruise operating expense increased in 2022 compared to 2021, due to the continued resumption of voyages, which resulted in higher payroll, fuel, and direct variable costs of fully operating ships, compared to the prior year when only 8 ships were returned to service. Costs were also impacted by inflationary pressures and continued COVID-19 related costs, including testing.

Fuel price per metric ton, net of hedges, increased to $830 from $693 in 2021. The company reported fuel expense of $186.9 million in the period.

Interest expense, net was $152.3 million in 2022 compared to $161.2 million in 2021. Interest expense decreased primarily as a result of lower interest expense in connection with recent refinancings and higher interest income, partially offset by higher debt balances and higher rates.

Other income (expense), net was income of $31.5 million in 2022 compared to $4.7 million in 2021. In 2022, the income primarily related to gains on foreign currency remeasurements.


As a result of the COVID-19 pandemic, the effects of the Russia-Ukraine conflict and current macroeconomic conditions, while the company cannot estimate the impact on its business, financial condition or near- or longer-term financial or operational results with certainty, it will report a net loss for the fourth quarter of 2022. The company does not provide certain estimated future results on a GAAP basis because the company is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of certain gains and charges. These items are uncertain and will depend on several factors, including industry conditions, and could be material to the company’s results computed in accordance with GAAP.

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