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    Norwegian Cruise Line Holdings Ltd (NCLH)

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    Business Description

    Norwegian Cruise Line Holdings Ltd. (NCLH) is a leading global cruise company that operates three distinct brands: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. The company offers a wide array of cruise itineraries to destinations across the globe, including Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, the Caribbean, Alaska, and Hawaii. NCLH provides a variety of features and amenities on its ships, such as multiple dining venues, bars, lounges, spas, casinos, retail shopping areas, and numerous entertainment options, along with shore excursions and hotel packages for pre- or post-voyage stays . The company's revenue is categorized into "passenger ticket" revenue, which includes accommodations, meals, and certain onboard entertainment, and "onboard and other" revenue, which encompasses casino operations, beverage sales, shore excursions, specialty dining, retail sales, spa services, and Wi-Fi services .

    1. Passenger Ticket Revenue - Generates income from accommodations, meals, certain onboard entertainment, government taxes, fees, and port expenses.
    2. Onboard and Other Revenue - Includes casino operations, beverage sales, shore excursions, specialty dining, retail sales, spa services, and Wi-Fi services. Also earns from onboard activities performed by independent concessionaires, sharing in their revenue.

    Key Metrics

    View all financials →

    Executive Team

    NamePositionStart DateShort Bio
    Harry SommerDirector, President and Chief Executive OfficerJuly 1, 2023Harry Sommer has served as the President and CEO of NCLH since July 1, 2023. He was previously the President and CEO of Norwegian Cruise Line from January 2020 to March 2023. Sommer has extensive experience in the cruise industry, holding various executive positions within the company .
    Mark A. KempaExecutive Vice President and Chief Financial OfficerAugust 2018Mark A. Kempa has been the Executive Vice President and CFO of NCLH since August 2018. He was Interim CFO from March 2018 to August 2018 and has been with the company in various roles since 1998, including Senior Vice President, Finance .
    David HerreraPresident, Norwegian brandApril 2023David Herrera has been President of Norwegian Cruise Line since April 2023. He was previously the Chief Consumer Sales and Marketing Officer from October 2021 to March 2023 and has held various senior positions within the company .
    Andrea DeMarcoPresident, Regent brandJanuary 2023Andrea DeMarco has served as President of the Regent brand since January 2023. She has over 20 years of experience in the cruise industry, previously serving as Chief Sales and Marketing Officer for Regent Seven Seas Cruises .
    Frank A. Del RioPresident, Oceania Cruises brandJanuary 2023Frank A. Del Rio has been President of the Oceania Cruises brand since January 2023. He started his career in the cruise industry in 2003 and has held various positions within the company .
    Patrik DahlgrenExecutive Vice President, Vessel OperationsJune 12, 2023Patrik Dahlgren has been the Executive Vice President, Vessel Operations for NCLH since June 12, 2023. He previously held various positions at Royal Caribbean Group, including Senior Vice President, Global Marine Operations .
    Daniel S. FarkasExecutive Vice President, General Counsel, Chief Development OfficerJanuary 2019Daniel S. Farkas has been Executive Vice President and General Counsel since January 2019 and became Chief Development Officer in April 2023. He joined the company in January 2004 and has held various roles, including Secretary and Senior Vice President .
    Faye L. AshbySenior Vice President and Chief Accounting OfficerFebruary 2016Faye L. Ashby has been the Senior Vice President and Chief Accounting Officer since February 2016. She joined NCLH as Controller in November 2014 after the acquisition of Prestige and has held various financial roles .
    Stella DavidChairperson of the BoardAugust 12, 2024Stella David has been a director at NCLH since January 2017. She has extensive experience in running multinational corporations and significant expertise in marketing and branding. She previously served as CEO of William Grant & Sons Limited .

    Questions to Ask Management

    1. Given the cancellation of itineraries in the Middle East resulting in a very short resell cycle and the geopolitical uncertainties in that region , how do you plan to mitigate similar risks in the future, and what impact might this have on your capacity planning and financial targets?

    2. While you achieved your net leverage goal six months ahead of schedule, reducing leverage by approximately 1.5x turns to 5.9x , what specific strategies are in place to reach your 2026 target of mid-4x, and what risks could impede progress toward this goal?

    3. With plans to add larger and more efficient vessels leading to capacity growth , how confident are you that demand will continue to outpace supply, especially considering potential economic headwinds and the necessity to maintain strong pricing to achieve your yield targets?

    4. You've increased your net yield growth guidance to 8.2% for the full year, driven entirely by stronger pricing since occupancy is at full capacity ; are you observing any signs of consumer price resistance, and how sustainable is this pricing strategy in the current market environment?

    5. The 2.5% cost spread target for 2025 and 2026 was described as a baseline ; given potential cost pressures such as fuel and labor, how achievable is this target, and what measures are you implementing to ensure you can meet or exceed it?

    Debt Maturity Schedule

    YearAmount Due (in billions)Debt TypeInterest Rate (%)% of Total Debt
    20240.58Current Portion of Long-Term DebtN/A4.2% = (0.58 / 13.71) * 100
    20251.32Exchangeable Notes & Other Long-Term Debt5.97 (Exchangeable Notes) 9.6% = (1.32 / 13.71) * 100
    20262.24Other Long-Term DebtN/A16.4% = (2.24 / 13.71) * 100
    20273.311.125% & 2.5% Exchangeable Notes, Other Long-Term Debt1.125 (effective 1.64), 2.5 (effective 3.06) 24.1% = (3.31 / 13.71) * 100
    20281.72Other Long-Term DebtN/A12.6% = (1.72 / 13.71) * 100
    20291.93Other Long-Term DebtN/A14.1% = (1.93 / 13.71) * 100
    Thereafter2.60Other Long-Term DebtN/A19.0% = (2.60 / 13.71) * 100

    Auditor

    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLPAt least 1988 PresentCurrent auditor

    Latest news

    Recent developments and announcements about NCLH.

    Financial Actions

      Debt Issuance

      ·
      Jan 22, 2025, 9:32 PM

      NCL Corporation Ltd. (NCLC) Creates a Direct Financial Obligation

      On January 22, 2025, NCL Corporation Ltd. (NCLC), a subsidiary of Norwegian Cruise Line Holdings Ltd., finalized its previously announced private offering of $1,800 million aggregate principal amount of 6.750% senior notes due 2032. This transaction constitutes a direct financial obligation for the company. Below are the key details:

      Details of the Obligation

      • Principal Amount: $1,800 million.
      • Interest Rate: 6.750% per year.
      • Maturity Date: February 1, 2032.
      • Interest Payments: Semi-annually on February 1 and August 1, starting August 1, 2025.

      Use of Proceeds

      The net proceeds of approximately $1,782 million (after deducting initial purchasers' discounts but before fees and expenses) were used as follows:

      1. Redemption of Existing Notes:
        • $1,200 million of 5.875% Senior Notes due 2026.
        • $600 million of 8.375% Senior Secured Notes due 2028.
      2. Payment of accrued and unpaid interest, transaction premiums, fees, and expenses related to the redemption.

      Potential Effects on Financial Health

      • Debt Refinancing: The issuance of the 2032 Notes allows NCLC to refinance higher-interest debt, potentially reducing future interest expenses.
      • Balance Sheet Impact: The transaction replaces shorter-term liabilities with longer-term obligations, improving liquidity but increasing long-term debt.
      • Covenants: The 2032 Notes Indenture includes covenants restricting NCLC's ability to create liens, enter into sale-leaseback transactions, or consolidate/merge without meeting specific conditions.

      Redemption Options

      • Before February 1, 2028: NCLC can redeem the notes at 100% of the principal amount plus a "make-whole" premium.
      • After February 1, 2028: Redemption prices are specified in the indenture.
      • Equity Proceeds: Up to 40% of the notes can be redeemed before February 1, 2028, using equity offering proceeds at a premium of 106.750%.

      This financial obligation reflects NCLC's strategy to manage its debt profile and optimize its capital structure ,.

    Corporate Leadership

      Leadership Change

      ·
      Jan 6, 2025, 1:50 PM

      Who is leaving: Ms. Andrea DeMarco, President of Regent Seven Seas Cruises, is stepping down from her role.

      Why: Her departure is in connection with the appointment of Mr. Jason Montague as Chief Luxury Officer.

      Who is stepping up: Mr. Jason Montague will assume the role of Chief Luxury Officer, effective February 17, 2025. Additionally, Mr. Frank A. Del Rio, President of Oceania Cruises, will report to Mr. Montague.