NCLH Reports First Quarter 2022 Financial Results

10 May 2022

Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (together with NCL Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian” or the “Company”) today reported financial results for the first quarter ended March 31, 2022 and provided a business update.

“Last week we reached the biggest milestone yet in our Great Cruise Comeback as Norwegian Spirit, the last ship in our fleet to resume sailing, welcomed guests on board in Papeete, Tahiti. The herculean effort to restart our fleet would not have been possible without the incredible fortitude of the entire Norwegian team and the unwavering support of our key partners and stakeholders around the world,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “Looking ahead, our strategy is to ramp up occupancy in a disciplined manner with the goal of exceeding historical Net Yield1 levels for full year 2023 while maintaining the high guest satisfaction scores and strong onboard revenue generation we are currently experiencing. We are encouraged that consumer demand remains robust with net booking volumes not only back to pre-Omicron levels but now approaching historical levels despite a temporary retreat due to the Russia-Ukraine conflict. Pricing remains very strong for all future periods and our value-add bundling strategy is working better than ever.”  

Great Cruise Comeback Update

The Company completed its phased fleet relaunch on May 7, 2022 and its entire 28-ship fleet is now back in operation. This significant achievement marks the completion of a nearly 10-month long process to return ships to service which began with Norwegian Jade in July 2021.

By the end of the first quarter of 2022 the Company had 85% of its capacity operating. Occupancy in the first quarter of 2022 was 48% primarily reflecting the impact of Omicron which caused operational challenges and disruptions, including additional travel restrictions, increased health-related protocols and certain port closures. During the surge, the Company continued to follow its core go-to-market strategy and did not discount-to-fill in order to boost near-term load factors. As the booking impacts of Omicron and the conflict in Ukraine have faded, net booking volumes and occupancy levels have sequentially increased each month. Despite these challenges, strong ticket pricing and onboard revenue drove positive cash contribution from the fleet that operated in the quarter.

The Russia-Ukraine conflict resulted in the cancellation or modification of approximately 60 sailings in 2022, which included all voyages with calls to ports in Russia. Three ships were redeployed as a result of the conflict including Norwegian Getaway to Port Canaveral, Oceania Cruises’ Marina to the British Isles and Regent’s Seven Seas Splendor to Northern Europe. In addition, the Company has also removed all calls to ports in Russia from its itineraries in 2023.

The Company reached a significant financial inflection point in March with Operating Cash Flow turning slightly positive. The Company also expects Operating Cash Flow to be positive for the second quarter of 2022.

Improving Public Health and Regulatory Environment

In recent months, the Company has seen a significant improvement in the global public health and regulatory environment. In March, the U.S. Centers for Disease Control and Prevention (“CDC”) removed its Travel Health Notice for cruising for the first time since the start of the pandemic. The CDC also recently announced a relaxation of certain protocols and recommendations in its voluntary COVID-19 Program for Cruise Ships Operating in U.S. Waters. In addition, more ports globally have re-opened to cruise, and travel restrictions continue to ease around the world creating a more favorable environment for ship deployment.

All voyages across the Company’s three brands continue to operate under its robust science-backed SailSAFE health and safety program which will evolve along with the public health environment. The Company also follows applicable local protocols at the ports and destinations it visits. As a result of its stringent protocols, the Company has seen COVID-19 prevalence rates vastly lower than what has been experienced on land during the pandemic.  

Booking Environment and Outlook

The quarter began with net bookings, particularly for close-in voyages, negatively impacted by the Omicron surge, which began to improve in mid-January. This momentum was temporarily disrupted as the Company experienced elevated cancellations, primarily for itineraries in the Baltic region, in the immediate weeks following the start of the Russia-Ukraine conflict. However, this impact was short-lived and net booking volumes have since shown sequential improvement, not only rebounding back to pre-Omicron levels but also now approaching the booking pace needed to consistently sail at historical load factor levels.  

As a result of the temporary setbacks from Omicron and the Russia-Ukraine conflict, the Company’s current cumulative booked position for the second half of 2022 is below the comparable 2019 period but at meaningfully higher pricing even when including the dilutive impact of future cruise credits (“FCCs”). The booked position improves throughout the year with the fourth quarter of 2022 in line with the comparable 2019 period and at meaningfully higher prices. Booking trends for 2023 continue to be positive with both booked position and pricing significantly higher and at record levels when compared to bookings for 2019 and pre-pandemic 2020 at a comparable point in the booking curve. 

The Company’s advance ticket sales balance, including the long-term portion, increased $418 million in the quarter to $2.2 billion as of March 31, 2022. This includes approximately $0.6 billion of FCCs or 27% of the total deposit balance. Gross advance ticket sales build was approximately $1.1 billion during the quarter, the highest level since the start of the pandemic.

Liquidity, Cash Burn and Financial Recovery Plan

The Company continues to take proactive measures to enhance liquidity and financial flexibility in the current environment and optimize its balance sheet. As of March 31, 2022, the Company’s total debt position was $13.6 billion and the Company’s liquidity was $3.1 billion, consisting of cash and cash equivalents and a $1 billion commitment available through August 15, 2022.

As part of its financial recovery plan, the Company raised approximately $2.1 billion through a series of debt transactions in February 2022 to further optimize its balance sheet. The proceeds from these transactions were used to redeem all outstanding 12.25% senior secured notes due 2024 and 10.25% senior secured notes due 2026, with the balance of the proceeds expected to be used to make scheduled principal payments on debt maturing in 2022, including any accrued and unpaid interest thereon, as well as related premiums, fees and expenses, in each case. In addition, in connection with these transactions, debt maturities were extended and certain collateral and guarantees were released.

The Company's monthly average cash burn for the first quarter of 2022 was approximately $375 million2, below the prior estimate of approximately $390 million. This cash burn rate does not include cash inflows from bookings or contribution from ships that re-entered service. Beginning in April 2022, the Company resumed debt amortization payments which were deferred during the pandemic.  

“I am incredibly proud of the significant progress we have made to-date in our operational and financial recovery, demonstrating our Company’s resilience as we navigate the evolving public health environment and geopolitical conflicts,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd. “With our entire fleet now back in revenue service we reached a critical milestone, which we believe will result in positive Operating Cash Flow for the second quarter. We are focused on building on this recovery momentum and gearing up to deliver on our industry-leading growth profile through 2027, representing 50% capacity growth versus 2019, beginning with the incredible, first in its class, Norwegian Prima this summer.”  

First Quarter 2022 Results

GAAP net loss was $(1.0) billion or EPS of $(2.35) compared to net loss of $(1.4) billion or EPS of $(4.16) in the prior year. The Company reported Adjusted Net Loss of $(760.5) million or Adjusted EPS of $(1.82) in 2022. This compares to Adjusted Net Loss and Adjusted EPS of $(668.6) million and $(2.03), respectively, in 2021.

Revenue increased to $521.9 million compared to $3.1 million in 2021 due to the resumption of cruise voyages.

Total cruise operating expense increased 266.1% in 2022 compared to 2021, primarily due to the resumption of cruise voyages. The increase in 2022 reflects higher payroll, fuel, and direct variable costs of fully operating ships. Cost for certain items such as food, fuel and logistics also increased due to inflation. Additionally, in 2022, there was an increase in repair and maintenance costs, including planned Dry-docks.

Fuel price per metric ton, net of hedges, increased to $724 from $590 in 2021. The Company reported fuel expense of $135.5 million in the period.

Interest expense, net was $327.7 million in 2022 compared to $824.4 million in 2021. The decrease in interest expense reflects lower losses from extinguishment of debt and debt modification costs, which were $188 million in 2022 compared to $674 million in 2021. The decrease in interest expense also reflects lower interest expense in connection with the recent refinancings, partially offset by higher debt balances and higher LIBOR rates.

Other income (expense), net was income of $38.1 million in 2022 compared to $27.2 million in 2021. In 2022 and 2021, the income primarily related to gains on certain fuel swaps and foreign currency exchange.


As a result of the COVID-19 pandemic, most recently fueled by the Omicron variant and the effects of the Russia-Ukraine conflict, 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 second quarter of 2022. The Company does not provide 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.

The following reflects the Company’s expectations regarding fuel consumption and pricing, along with accompanying sensitivities.

As of March 31, 2022, the Company had hedged approximately 41% and 24% of its total projected metric tons of fuel consumption for the remainder of 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”), Brent and marine gas oil (“MGO”) which is hedged utilizing Gasoil. 

Anticipated non-newbuild capital expenditures for full year 2022 are expected to be approximately $500 million. The Company’s anticipated expenditures related to ship construction contracts were $1.6 billion for the remainder of 2022 and $2.5 billion and $1.4 billion for the years ending December 31, 2023 and 2024, respectively. The Company has export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.9 billion for the remainder of 2022 and $2.0 billion and $0.7 billion for the years ending December 31, 2023 and 2024, respectively.

Interest Expense, net is expected to be approximately $155 million for second quarter 2022 and $605 million for full year 2022, excluding losses on extinguishment of debt. Depreciation and Amortization is expected to be approximately $180 million for second quarter 2022 and $750 million for full year 2022.

Company Updates and Other Business Highlights:

Environmental, Social and Governance (“ESG”)

  • Committed to pursue net zero emissions by 2050 across the Company’s operations and value chain. To support its path to net zero, the Company has also committed to develop short- and near-term greenhouse gas reduction targets. Learn more here.
  • Published first Task Force on Climate-related Financial Disclosures (“TCFD”) Report which provides critical transparency to stakeholders. View the full report here: 2021 TCFD Report.
  • President and CEO Frank Del Rio signed the CEO Action pledge for Diversity & Inclusion in March 2022, further demonstrating commitment to advancing diversity, equity and inclusion in the workplace.

Fleet and Brand Updates

  • Announced world famous superstar pop icon and "American Idol" judge Katy Perry will serve as the godmother to Norwegian Cruise Line’s newest ship, Norwegian Prima and be the headline entertainer for the ship’s christening ceremony. Learn more here.
  • Norwegian Cruise Line launched the cruise industry’s first NFT collection, open for auction and sale, and sold a collection of six NFTs to celebrate the launch of the cutting-edge Norwegian Prima Class. The NFTs were created by Manuel Di Rita, widely known as "Peeta," the Italian artist who designed the hull art on the Norwegian Prima and her sister vessel Norwegian Viva. All proceeds from the NFT auction and sales will be donated to Teach For America. Learn more here.
  • Oceania Cruises set a new single-day booking record on March 2, 2022 with the launch of its 2024 Around the World in 180 Days voyage and its Grand Voyages in the Asia-Pacific region, surpassing the previous record set in September 2021 by almost 12%. Learn more here.
  • Celebrated the float out of Oceania Cruises’ newest 67,000-ton, 1,200-guest ship Vista at the Fincantieri shipyard in Sestri Ponente, Italy. Vista will debut in April 2023. Learn more here.
  • Announced Oceania Cruises’ Riviera and Marina to undergo stem-to-stern re-inspiration in 2022 and 2023 as part of the OceaniaNEXT Learn more here.
  • Regent Seven Seas Cruises marked the return of its entire fleet to service on March 26, 2022.

Other Highlights

  • Activated Company’s Crew Relief Fund and is providing ongoing communications and logistical support and counseling to Ukrainian and other team members impacted by the Russia-Ukraine conflict. Also pledged an additional $100,000 to Save the Children’s Ukraine Crisis Relief Fund.
  • Announced the signing of a Memorandum of Agreement to develop berthing and upland facilities in Whittier, Alaska in partnership with the Huna Totem Corporation. The privately funded development project will consist of a marine vessel docking facility able to berth vessels from the Company’s three brands, along with related structures including a cruise ship terminal and facilities for rail and bus access. Learn more here.

Conference Call

The Company has scheduled a conference call for Tuesday, May 10, 2022 at 10:00 a.m. Eastern Time to discuss first quarter 2022 results and provide a business update. A link to the live webcast along with a slide presentation can be found on the Company’s Investor Relations website at  A replay of the conference call will also be available on the website for 30 days after the call.

1 See “Terminology” and “Non-GAAP Financial Measures” below for additional information about Net Yield.

2 Cash burn rates include ongoing ship operating expenses, administrative operating expenses, interest expense, taxes, debt deferral fees and expected non-newbuild capital expenditures and excludes cash refunds of customer deposits as well as cash inflows from new and existing bookings, newbuild related capital expenditures and other working capital changes. The first quarter 2022 cash burn rate reflects the deferral of debt amortization and previously agreed to newbuild related payments.

NCLH Reports First Quarter 2022 Financial Results