Norwegian Cruise Line optimistic about future despite $666 million second quarter loss

©Miami Herald

A view of Norwegian Cruise Line's Norwegian Joy on April 25, 2017. - Visual/Zuma Press/TNS

Norwegian Cruise Line Holdings reported $16.93 million in revenue for the second quarter, mostly from passenger ticket sales. The results marked a sharp fall from the $1.67 billion in revenue reported during the same period last year.

In a financial filing Thursday, the Miami-based company reported an adjusted net income loss of $666.4 million, or $2.78 per share, for the second quarter. Cruising was halted in the U.S. in mid-March and will remain so at least through October while COVID-19 cases continue to climb.

Though grim, the update was more optimistic than the company’s previous filing. In May, Norwegian Cruise Line Holdings, parent company of Norwegian Cruise Line, Regent Seven Seas and Oceania Cruises, warned of possible bankruptcy and said there was “substantial doubt” about its future.

On Thursday, CEO Frank Del Rio said he was surprised by how many people are still booking cruises. Bookings and pricing for 2021 are within historical ranges, including bookings made with future cruise credits, the company reported.

“If you had told me that we were going to be facing these set of circumstances, and your question is, ‘Frank, would you be taking any bookings?’ I would have laughed at you. I’ll say, ‘Of course, not, who would book? It’s crazy,’ “ Del Rio said. “But people are booking. People are confident that we’re going to come back.”

Still, there is no telling when U.S. cruises, which bring in the most revenue for major companies, will be up and running again. The CDC no-sail order remains in effect until at least Oct. 1, and companies announced Wednesday they are canceling cruises until Oct. 31.

To bridge the gap, Norweigan Cruise Line Holdings reported it raised $1.5 billion in July through investors, creating what Del Rio called a “good liquidity runway,” and has brought down operating expenses by 68.5% compared to last year. The company is not paying crew stuck on its ships waiting to be repatriated.

Del Rio said COVID-19 outbreaks on ships that have resumed cruises in Europe — the largest affected 41 crew members and 21 passengers on a Hurtigruten cruise ship in Norway this week — are a learning opportunity.

“Look, there’s no way to spin the initial reemergence of COVID onboard vessels,” he said. “But … it’s an opportunity to learn from them. This virus teaches us something every day.”

Five doctors, including three who treated COVID-19 patients on cruise ships, interviewed by the Herald recommend cruise companies test passengers for the virus before boarding if they are going to resume operations before a vaccine is available.

A Miami Herald investigation found that 72 cruise ships — 28% of the global fleet — have been affected by COVID-19 since the pandemic began and at least 102 passengers and crew members have died from the disease.


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