NCLH Shares Optimistic Outlook for Return to Service

Norwegian Cruise Line Holdings Ltd. struck optimistic notes in a conference call with analysts, highlighting its ability to weather up to 18 months of zero revenue due to the Covid-19 pandemic.

“What the team at Norwegian has done is nothing short of extraordinary,” NCLH President and CEO Frank Del Rio said during the call after releasing the company’s first-quarter earnings report.

The company reported an adjusted loss of $211.3 million, or 99 cents per share, compared to income of $181.8 million, or 83 cents, in the first quarter of 2019.

In recent weeks, NCLH engineered the “highly successful execution of over $3 billion of capital raises, which the company believes will allow it to withstand an unlikely scenario of over 18 months of no operations,” according to first-quarter documents released May 14.

During the conference call with analysts, Del Rio said the company’s three brands—Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises—would likely return to service in phases.

When cleared to relaunch, he said it’s possible to begin operating five vessels per month, so it could take about six months before the company’s 28 vessels are back in service.

However, how quickly operations resume depends on whether ports are open, although ships can move to create itineraries with destinations that are open to tourism, Del Rio said. The company currently has a target date of July 1 to restart operations.

The industry needs the Centers for Disease Control and Prevention to lift the no-sail order; doing that requires showing government health agencies new screening and sanitizing protocols. The company is working with Dr. Scott Gottlieb, a former commissioner of the U.S. Food and Drug Administration, to provide independent public health counsel as the company develops new health and safety standards.

Del Rio said the number one factor when the company restarts operations is “regaining the confidence of the consumer.”

Still, despite the ongoing Covid-19 outbreak and shutdown of sales and marketing efforts, people are booking cruises, he said.

“Despite that shutdown, we’re still taking bookings. That gives us a lot of encouragement,” Del Rio said. “Despite everything going on, people still want to cruise. There is a future, and the future will be bright.”