NCLH - Earnings call transcript Q1 2024 | Norwegian Cruise Line Holdings Ltd.

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Operator

Good morning, and welcome to the Norwegian Cruise Line Holdings First Quarter 2024 Earnings Conference Call. My name is Joe, and I will be your operator. [Operator Instructions] As a remainder to all participants, this conference call is being recorded. I would now like to turn the conference over to your host, Sarah Inman. Mr. proceed. please Inman,

Sarah Inman

CEO and for Joe, update everyone. for Vice President Thanks I'm and Line Thank Kempa, Mark first good quarter us Executive and Sommer, Harry our today and business Norwegian XXXX joining Cruise joined Holdings; CFO. you, President by morning, of earnings call. and

that Relations on refer conference Throughout the www.nclhltd.com/investors. Investor this reminder, simultaneously to a at slide is being found webcast we website will can on Relations website. As call the our a presentation company's be Investor call,

the replay conference today's call available Both and presentation for call. be will for following XX days

Before we items. like cover a begin, few I would to

press Our the release. statements. involve These uncertainties differ in that our first on Investor such was results Relations actual considered conjunction materially with could website. from contained cause our risks issued and our statement includes XXXX results that this release This to statements and statements available earnings with morning be in is call cautionary should quarter forward-looking

comments directly comparable to Our most disclosures measure other and earnings and to financial are presentation. non-GAAP A associated reconciliation release may financial in GAAP the our measures. refer contained also

I'd like Sommer. the call to over Harry? to Harry turn that, With

Harry Sommer

position announcement solidified ticket that by for brands, evidenced for at trajectory demand record Sarah, is lead for it's such high, delivery all XXXX X morning, even cruise Thank financial innovation you, on be driving outlook improved new and joining strong brighter newbuild an across pier strong The milestones, quarter of advanced to available remainder continued exciting have for are to performance XXXX. the effect our performance wonderful combined and the first years pleasure product in ships booking, exciting Today, the for including my everyone. Thank the our year the our our developments, continues as guest the all-time of us in our and our and time satisfaction earnings some you good the to record sales strong guidance record quarter for some announcements scores. an noteworthy exceptional QX . The all that to today our our It's and quarter call. ship book recent company vacations board of recent discuss for award-winning come. demand trends with booking and and service as ahead.

be color quarter over turn Later significant also Sustain. I'll XXXX. progress our performance made first XXXX. impressive sustainability call, in who several forward off the diving end into updated on we've to from our on guidance positive carrying kicked and it momentum global the Sail program, year the more provide for trends Mark, of I'll will with & the We

As achieving period, bookings see led successful our you this we season most wave on sustained to quarter, in the can record throughout strong Slide demand X, ever. which

As remains high. all-time a our result, XX-month at forward book position

financial In the occupancy first of doubled results, to of adjusted higher back during terms stronger and levels. EBITDA year on quarter the pricing last compared nearly

robust a the the improved flat XX divided to margin, trailing months. is EBITDA Our operational which period, margins gross adjusted costs with adjusted core year-over-year, in now growth noticeably essentially during our leading for XX% margin adjusted approaching also EBITDA by

we net quarter an sheet balance quarter at when As important first net during result, our to improvement leverage a our we strengthen the and end ending marking our on for for well the journey turn by of X.X our in reduced milestone a full to in leverage the guided year. XXXX, the turn compared X.Xx path the leverage,

during These and the quarter. strides S&P, upgraded recognized rating were issuer by our which ratings credit both issue-level

on of can't adjusted EPS. and that XXXX of our our the all help guidance the for guidance for later income key details we While have metrics we'll quarter full EBITDA, call, adjusted adjusted raised year, metrics more yield, including net essentially in I exceeded net first share but and the consequently give

the first historic Global, across award-winning which transformative call ships milestone our brands. program all history. X X key This our new encompassing Another the conference of quarter Seatrade newbuild on was during most during order, Cruise company's our we last our in shared is newbuild

our and We island for the also for attractive our our beyond. we're announced of it continued I our paving I Great Stirrup at decade making the next X-ship future in more guests. the the on will construction pier destination know thrilled which even existing [ enhance am ] Cay, infrastructure an way growth the about as private

our to are priorities, on due near-term which our quarter are first detailed Our continued focus on X. successes Slide

compared X% record reducing all XXXX, turn achieving a and and by we're strong while capacity seeing our the leverage net increasing forward grew successfully position, price across board. full while results XX-month a We [ to book ],

and I Turning past. the we measured to growth Slide shown emphasize X. to frequently optimizing our financial strong to fleet have delivering our want in drive capacity long-term returns. again strategy of you once

newbuild X of ships XX in CAGR XXXX. XXXX X% XXXX quarter, from to representing from capacity Our a from pipeline the and to increased XXXX to X%

has trend and state-of-the-art to and to expect more the with Historically, outsized we revenue capacity continue this vessels incorporation and of efficient growth driven adjusted growth, our fleet. larger EBITDA

all and environment all robust are booking we brands X Turning of our attention witnessing of X, on our in to our consumer the shown resilient markets. across Slide current demand and

a first a quarter result, book position next culminating the the wave months, of XX into to extending leading a for record this As year, we noted continued bookings record XXXX. season, during record

up well to see the all across and perform continue Europe summer. which make We healthy to deployment brands and including of markets, over products, demand our and the majority very Alaska, continue

and the earlier announced in Sea cancellation that Middle strength and East of Red All of we the is year. rerouting our despite this this itineraries

full itineraries of impact sailings sales a yield. brands ensure for on our We the no also By well XXXX all sale. advance, sailings we adjusting for sailings to replacement XXXX the the cycle all replacement are and recently cancellation announced of X our spring across Sea in these can of Red already and

are higher book encouraged in strength our remains highs next the by XX we which the months, pricing. position for with at all-time Overall, commensurate

is yield strong. growth result, As a

guidance first the to growth and And of provided result, the a X.X% at XXXX basis, points shaping back up we a basis strong X year late guidance currency quarter, up as currency demand a we remainder strong exceeded XX basis coming to is our a X.X% on XX.X% of first raising basis months yield During February. XXX XXXX. approximately constant guidance constant for on just full are from ago from yield the be in the in points quarter strong the on year.

occupancy are full to we ships. essentially already guidance Please note unchanged as that guiding our remains

is guidance So stronger positive our our remains with the increase also back on the remains in of a across highlight entire consumer target the healthy that board. revenue resilient. This is pricing. seen and sign a strength Onboard

up XXXX. We guest's leads which ] Preselling [ of of compared during a continue cruise to to typically to journey. precruise from packages forward higher absorb were XX% purchases, a strong demand cruise spending overall

Turning and success mix, pricing, our to first to coupled quarter leading position I'm presale with To This X. packages capacity in by industry a all-time ticket driven excited XXXX, beyond announce sales. reached dynamic robust high advanced was cementing deployment continue Slide an growth. increased that this

billion. a XX% record Our reaching $X.X advanced sales ticket year-on-year, balance rose

to seeking strides grants program, We on which kicked quarter, EU be government year Slide our of support we with by accelerating ready fund methanol efforts for you Over our innovation Sustain the the applying sustainability fully of initiatives considerable class X. Prima green to our to vessels the capable. transition goal & have methanol six the can the off out through taken being Sail see past in our

committed be goals. short- to to our long-term decarbonization continue We and

We're of we key [indiscernible] also port in minimizing our stays schedule. contributing is This to target is the that our to cleaner to journey equipped achieving now to ahead of technology year-end during air proud our company-wide well XXXX announce visit. emissions communities XX% port fleet and with

to our didn't go risks gave enhancing change. Our proactive to a opportunities us pushes rating continue B initiatives. to we've and our related us efforts endorses steps CDP notable manage taken of and measure environmental approach and our sustainability This in Climate recognition to the climate unnoticed. acknowledgment impacts

to sources being. Companies us America's category These stakeholders prioritization with is and recognition operating we recognition also located. our to cleaner markets, gained invest in the dedication named creation JUST but the journey, these of X testament Capital million integrity well X of in are as carbon not commitment offsets JUST offsets This a top Also, Our of a energy us their to products. equitable our projects job the fair communities equity in where leisure our and company. local ethically operations completed support energy and purchase in renewable decarbonization most Index only and in restaurant the invested and

team an sustainability, Diversity and well-being individual continue to for unwavering to our talented recently our in for a of to dedicated underscores a environmental our This my progress team honored all us inclusive diverse members. our ethical welcoming for being with in are we to motivates the of entire stakeholders. ideas. their to practices making creating This in empowered. every efforts empowered backgrounds and Forbes' were of innovative workforce, award engaged one represented, Employers Best fostering I gratitude on where express want execute is testament XXXX. generate and company and efforts all where This our a commitment place business our to recognition of feels workplace valued Finally,

I ongoing journey be towards blocks more building proud couldn't entire and for of as serve future. more team these accomplishments all our a These our responsible in accomplishments. impressive of sustainable

results Mark I'll over through to turn outlook. that, you it Kempa? walk to With Mr. and our financial

Mark Kempa

otherwise little Thank quarter I'm My voice you, focus basis per improved Unless on comparisons I period financial and same apologize first net if our are and a year our in constant XXXX. Harry, day noted, everyone. financial and excluding a commentary cruise capacity morning, guidance my the today, good on XXXX solid on currency commentary and yield cost, adjusted results, our the full fuel weather will to today increasingly under net my strong metrics in cracks XXXX position. so XXXX are advance.

are we for first announced the beating had months the our with exceptional start board, X highlighted only an first we quarter quarter, which exceeded across and guidance to XX. ambitious which begin our Let's the Slide We targets on already results, year, ago.

top materially of XX.X%. with line. guidance were exceeding XX.X%, impressive increasing net our Starting yield the Results with

lower deployment itinerary we sailings saw quarter, the which load demand of of quarter last including contributed several unprecedented total in first to XXXX. exceptionally for we discussed importantly, first quarter. the factors As a Caribbean top the XXXX, But our strong more XX% lapping mix and factors in the less-than-optimized approximately quarter, line of of experienced in quarter growth this the represented

slightly at $XXX. Looking costs, per in cruise below at costs. capacity excluding fuel day, Adjusted net guidance came

dock from dry As the and this related to compared the expected, costs XXXX. days number approximately in increased includes $X quarter

have would of fuel, of dry demonstrating our essentially impact offset been adjusted net organization. the cruise excluding disciplined the Excluding across our the inflation to initiatives savings impacts ability flat docks, with year-over-year, costs, our cost

incredibly reducing costs, essentially allowed almost generated Adjusted in year. the Overall, results growth, the of loss EBITDA guidance exceeding top quarter in $XXX year's million, the to above our returned the was Strong profitability and quarter. of continued prior with line in $XXX are $X.XX We and approximately $X.XX, us adjusted pleased prior to in $X.XX results. of we all with in well doubling combined the first with EPS beat first guidance the of metrics quarter. million of we the quarter guidance exceeding progress

in on metrics, building rest XXX which XXXX full the experienced growth higher X.X% record we a net percentage increase experienced are X.X%. the first our the as demand and full we are basis with and have XX. reflects that our can yield of for expectations revised of our to of expectations the for but raised strength seen XXXX. several guidance remainder a momentum This year importantly, on result raising strong approximately full be We through from point our more the bookings quarter, year point year this on Slide We

wave Red this season, itineraries mentioned have the the offset the strength impact. Last to us Sea. in our on we East Middle of redeployment however, and almost fully and has business quarter, in to allowed impact seen The cancellations we through business due

growth implies partially $X.X and $X.XX, of ] building guidance of year to EBITDA full the for net prepandemic growth the $XX beat first increased to million. our a made a year Adjusted year first $X.XX beat offset guidance our due of $X.XX remainder $X.XX. the higher [ Adjusted costs of $X.XX was interest quarter, million for of quarter range approximately the fuel in rate. higher is the low on the for and increased year Our which raise by to basis to expense demand for the $XX guidance up pricing, in balance of the on net yield the EPS billion guidance mid-single-digit year and exceeding

These would both the continued shipboard. raise strong numbers efforts our without from possible entire team, and focus not related guidance be and and shoreside

Now let's take the for second quarter. at look guidance a our

We a net East above slightly strong the expect is which ] Sea. expected Middle [ averages with redeployment and growth to yield despite X.X%, and impacts of second quarter Red the the our approximately increase canceled in historical itineraries

cruise approximately day $XXX expected costs, per the last capacity be excluding fuel net X.X% same Adjusted or is approximately quarter to above year.

prior last dry we year XXXX As will to mentioned more in challenging. quarter, days make dock comparisons

in results point Second the XX scheduled days more impact the approximately has quarter or adjusted cruise This for quarter. a than XXXX dock on net 'XX increase fuel year. cost basis quarter dry last ex in $X

flat fuel is our cost to the demonstrating organization. more once across savings be essentially the initiatives Excluding impact, continued excluding $XXX, adjusted expected the dry approximately success cost cruise of year-over-year, net dock

a result, to is the adjusted expected Adjusted income approximately to for $X.XX. $XXX to be about be $XXX EBITDA expected As quarter adjusted million. EPS and is second million net be approximately

but Moving into margin office, pinpointing deeper cost scale We efforts -- bit [ The XXXX, per we was our transformation first a the excluding of facet Slide XX. reducing first and to by costs fuel dive XXXX ] the supported opportunities our remain essentially results With boosting margins irrespective across want to committed of initiatives. in day net adjusted where fully flat clear impact. our in flat their organization. approach the was of continuously are of the quarter business. dry a $XXX meticulous across capacity every to compared dock these are quarter cruise ex to I enhancement

Our which in from -- expected expected full ex flat. the remains ex cost impact is guidance dry be to of on full year XXXX docks the the $X unchanged essentially and be adjusted for drydock, year, $XXX, net net fuel approximate the are to which cruise are

the For the models, of quarter. that expect remind with the X/X your drydock the to I the in would impact remainder we fourth of half during you year see about first

I track operational by metric to internally, which Turning adjusted we an focus is to over XX. by Slide adjusted margin on adjusted EBITDA that which is important EBITDA margin. dividing want calculated our gross

In year we as returned focus XX.X%, have you compared months, to we see our the the the basis. full operational at EBITDA was business basis rightsizing QX, Looking can adjusted significant XX last and improvements on trailing have made full the points margin XXXX. XX-month operations cost improving XXX to

margin expect We updated see based XX.X% our on improve to ending to throughout the year, approximately this guidance. at continue XXXX

striving market, growth; base. First, be net our and this capitalizing demand and by on you our focus the will As improve cost on into journey rightsizing this are drivers: converting fueled the cruise second, know, we in continued and margins, X and main yield net costs strong to sustainable quality and

on profile XX. and sheet maturity Shifting balance debt to Slide the

of this interest the XXXX, reduces an secured in In refinancing from unsecured This commitment our repaid improved in was basis. all refinancing, a $XXX step another million while to and strengthening highest debt. which $XXX backstop collateral, due connection sheet. secured million X.XX% refinancing During our expense quarter, also balance rate interest the releasing with notes important leverage we our related we our forward completed

Slide on leverage XX. to Moving

our many we to again. record as we net leverage the earnings by so delivering of alone, discussed track net a leverage and reduced reduction, a currently We we previous In first have on have on do in net quarter over are calls, for at debt and significant a path our payments. and is organic to from reduction quarter propelled expect to year-end and full leverage continue amortization X quarter, by time scheduled generation turn cash we improve a This the X.Xx. turned

X.X end anticipate range, reducing ending sequential upper By approximately Xx net we quarter. XXXX of the from in XXXX, in our XXXX, by leverage with the improvements year-end turns each

on reduction at our my I section, out I is of to derisk plan XX. plan more year The drive continue value. able May in on reiterate, been a we've Day balance further the our quarter, the guidance net our share and shareholder and Investor on plan this sheet to adjusted a want all beat We Closing metrics. raise refining are full been has seen and multiyear EPS. momentum on guidance the to currently carrying leverage yield fantastic year, we full we strong to this quarter to over key to for where the adjusted adjusted EBITDA, have income

This to coupled leverage quarter the enhance resulting balance testament drive lower flows, cash and and to to strong top line a and with our in sheet. use EBITDA margins ability is related efficiencies derisking strong results,

are the it that, I'll rest of the strong the how remarks. to turn start. back Harry after excited see out closing to year We plays for With

Harry Sommer

wish thank speed you, I recovery. you a Mark, Well, of and

as team forward, be on will our Moving our entire work, XX. shown focused Slide most important on

to strong while continue will capitalizing guests value. on we demographics yield delivering First, that net demand target our experiences drive on upskill to from focus the execution,

virtually and will already Norwegian last aspirations leverage to Holdings. long-term provides improvements eagerly that build Line efforts continue it person platform attend quarters finally, into a metrics This will for webcast. our offer reduction map occasion road business. upon continuing to ongoing the the our further strategy by we efficiencies from We ambitions York financial cost with hope articulate we the time, strategic and Investor improve Cruise in reduce of with are over in our over the time. of hosting and as or few balance throughout privilege the at net an enhancement financial we future for strengthening having will to able the our progress organization. us our insight sheet will a Second, In the Day. is made margin through our . And New you either are we weeks' be and stability Exchange It Stock to further forward looking an to

and that long-term bright, journey you. outline session. with the our operator will guests to the and growth hand value. initiatives our call begin excited that, they value is experiences share back The will shareholder and the key measures And with Q&A we our the certainly underpin profitable delivering We while to this towards I'll providing drive future are to

Operator

Instructions] of [Operator the line our Politzer question comes with from Wells And Fargo. first Dan

Daniel Politzer

pricing I more the strong. the on a the hoping we was bit certainly remainder it seems mean and could year. first little was quarter I of of the for dive set kind up in very

As we think allocation versus about that more think for can a kind of allocation the you're and Europe the relationship the tweaks capacity we the pockets And capacity back simplistically, certainly similar about at strength least of the your pricing? in falling maybe of terms more to rest pricing? outsized seeing second quarter, in between classify and should to where maybe XXXX half. How put in strength off little the relative modest you bit but

Harry Sommer

us any or the brands our So in all that wouldn't Hawaii ships. Alaska, seeing well and Listen, X pricing areas we're there today. all Dan, outsized thanks say across major doing Europe, undersized. We're strength across are of are for our well joining Caribbean. doing we in I that course, areas yield of Bermuda, good We're deploy that the

X But growth talked QX very visited and had those, outside place the that the and the the a Red yield QX our other broad-based of before, demand to where had we in the little bit seeing had of previously we're We're happy where redeploy voyages itineraries. a quarters. we've in to Sea back with challenge board. across think I is only

seeing. guidance our think As Mark a I that which we're strengths and full we underscores myself, the increasing point, discussed, both yield we're by

happy where continue record very to with positions, be book at pricing. we We're are. We record

Daniel Politzer

Can I seem on expenses pivoting of I And then the success. you you've couple is side. think food a cut some Also just the marketing, to [ you've to remind seen be really pockets Got the where talked cutting those right? it. area an cost just there. us ], about where you've fat think you

kind have you where we of the And kind about the seen see cost additional looking structure, buckets as that ahead? the more across you opportunity So success? think the where of is

Mark Kempa

it's Dan, Mark.

just too more I want We're speak. as little it I really bit first, much entire we That's clarify. So a wouldn't organization. to efficient across classify generous. can probably get so how a to the looking cutting at fat,

earnings and As really -- in was call, in of first bunkering that our I piece mentioned our big fuel -- looking the prior at reducing processes. our

actually if And reflected if I curves, at the mid-to-upper where raised that yes, single that, only the fuel the yet, don't was think the -- curves digits look in if up were things it's it's from double-digit said the million from recall latest our customers think marketing, I our cost But really that's correctly, about anywhere you by savings, the guidance. you on across X%. we value. I up that across apart vessel and

-- more that cutting customers we're we're experiences about. those cut, not care do about, what doesn't importantly, just reducing the looking customer at really But while really to on is improve what items let's care

across So no little of things board. a the here. lot It's bullets silver just there's

We been continue we're are fact by we reiterated cost I'm the with to just that. the that very that future our That's making. And improve in the can guidance. excited hopeful on we reiterated progress

Harry Sommer

you emphasize way specifically guests. Oceania very have to are that direct if food I region, and [indiscernible] add can especially opposed intermediaries still reduce just we the food the want serve quality thing, buying on in no quality food. Dan, just serve, we the logistics. to the things to we I'll in will, good seen that And of we We efficiencies, where and X like best food have to related in more our well, as quality as

the and but most food, can have industry the still food reflect have I lower to other items brands I do through that, and respective in made will up enough. food that their the committed We quality quality the -- have money that We think the the in we in most not options, X that emphasize can't and mentioned. believe that do food. improvements shipping our warehousing, best places that show save are obviously but in massive the we logistics, we

Operator

And Vince from line Cleveland our next question comes Research. of with Ciepiel the

Vince Ciepiel

half. bit to wanted I zoom second in on more the a little

think at you point, had one quantified I Red Sea the guys impact.

think was to for X through XQ. like it XQ I points X

third the Sea a be I had yield And was because was Red it to that view curious that XQ highest least might if think be quarter you expected impact. quarter XQ there growth I case. of just the the through still

Mark Kempa

Vince, quarter will yes, you recall quarter. XX% yield and be And remind correct. the QX of third yield are had X%. expect We still to that in of growth everybody I I of correctly, highest growth we of pricing 'XX, growth if

rolling healthy very are of we QX So a over XXXX.

So to over not rolling much well, just be but highest. do comp, that's it doing year but that not the be implied certainly third higher is of to expect this we quarter QX a is

Vince Ciepiel

then And leaning really there, question, you Great. private in. and marketing islands strategy efforts seem bit ramping of bigger the little and industry a peers investing kind across picture to be in

what customer you you're decision. leads what there out looking returns are have that how that kind for the to you that curious went of about making that's believe of kind is there seeing Just and

Harry Sommer

Yes.

we islands our Belize, our Great the Bahamas X private destinations. at Harvest have highest-rated X So Cay in Stirrup when those today, are Caye in and look we

pier at Harvest had we Caye. Now really a ] [

would excuse at a Stirrup us than So caused have more much me, in Great issues in But Cay, we GSC, ] [ the liked. there frequently of pier were area. to lack no that miss

once making an we gets Mark visit have said time, as on to believe certainly as the long the course, experience it we to able it on as But the we being before, us, of be XXX% of we funds will by that to visit investments improve for there. the worth us things that the ROI can just almost almost confidence basis continue value. there So focus, guest that

what with which give benefit from is geopolitical Clearly, more will fantastic. added will places a But and listen, GSC world of which zone say, Bahamas confidence think the year various think just the time. like places we I of being close to be to in to the home, certain We us over any available doing pier, invest. we're have Belize uncertainty more perhaps we've now. seen in continues an

it's will the a future great We're be multiyears like in So to the committed not area. addition.

Our love guests it.

the and resort-type is experience think continue of already improve we'll I more the experience, fantastic, it. on island a to

Vince Ciepiel

Great.

Investor Looking forward Day. . to

Operator

Steve our from of question next And comes with Stifel. Wieczynski the line

Steven Wieczynski

if yield I yields if down of the revised we for remains year, strong. your the guidance of demand about So mean, kind we think extremely it's breaking the look, pretty stay and remainder that on clear

as seems or given used the versus you the So us I isn't as metrics, opportunity to around book might thinking close conservative seems great be I taking yield of onboard a conservative. is view what sense position. just pretty like which makes about possibly how we're revised around to witnessing the guidance strong guess it is you're year. question guess somewhat maybe your And the that pricing onboard rest the It

would So be there help any appreciated. just

Harry Sommer

part ticket, on maybe question second let the first I'll Mark and part. the business take the I'll on onboard comment of

and the I ticket With presell onboard important our think the much we is the less than it way that distinction onboard items, and past. package between in is

the are our the our that that's prepared guidance about by our you obviously, sold encourage onboard number full yield point as the remarks, year. listeners would [indiscernible] advance. little press gives for bit raising for packages other focus talked I us in the with on really in what because we to confidence future split and we're release. We're a total sales, That arbitrary. revenue a happy the being is analysts, just happy So and being And the with in said,

terms conservatism, In of maybe Mark can that. to talk

Mark Kempa

Yes, Steve.

on across continue consumer very, trends very an healthy, very strong see So every to look, the example, to we we see ship. as the maybe look, revenue continue stream

first optimistic X already had So if months we about we were we very, quarter quarter, maybe to into frame a our guidance that front. provided prior we for it when you on the very way think the remain is, And -- guidance. had that

And at driven predominantly onboard point. ended, when by That's we look X.XX you almost I by we beat revenue. where think

expect in reiterate we quarter any of to are strong we want we don't consumer extended consumer we want see think be our I revenue. the onboard very most curve, we know in by that I the driven upside respect. to But ultra very, I booking if say a While the yes, see to And to that given spend. conservative, will continue

Steven Wieczynski

That's then, opportunity, EBITDA versus I'm guys of are little we margin XX% they of longer-term be guess the at should looking if margin the you how kind excuse improvement, And equation? yield XX, And are prepandemic end side if Okay. of where I a the yield especially towards projecting bit -- now, about year. on of we were Slide will about you further or great. just as of look think this where the a margin just out, margins the think more about me, Mark, driver

I this to what guys the I'm out you more trying have take given something done opportunity to and May at of a is what significant here amount already about get cost of guess address XX. maybe equation, far so the on you'll

Harry Sommer

Yes.

'XX, out. was guidance that's which focused for QX I was So I you I this to call sentence and QX for super last the provide you. in answer -- Listen, in that we've going about we've laid because that think thank think we're talking

talk have longer I we'll about think XX talking to the term, days wait to XX until more May about it. more

Operator

with Our comes Montour the from next question Brandt of line Barclays.

Mark Kempa

We lost Brandt.

Harry Sommer

to Maybe should Okay. the next. move on we

Mark Kempa

We'll move to next caller. on

Operator

come of from the Melius with And Research. our line next Cummingham Connor will question

Conor Cunningham

I is talk press know I even the mentioned on but over up. 'XX, about I months. release, you you're think how only record to remarks, you book on at prepared position In the shaping is next XX your just that assume up. in curious a pricing 'XX or want

details be Just helpful. would that around any

Harry Sommer

Conor. that, for you thank So

out the that QX of next would include So 'XX. XX I'll point just months

So this at of be, the guidance. you And that in I some booking best would think cycle course, quarter gives that booked point the XXXX.

So 'XX not to for you really quarters, into gives but the prepared that last insights I some is guidance up. think shaping give X how

Conor Cunningham

is your throughout obviously realize does of Just then is headwinds, in good 'XX? rate more I going it but kind cost details And Or a on appreciate to 'XX. lingers 'XX? dry the I trying to the roll in that dock off and on Okay. really be exit understand, 'XX, that of

and we about So dry year think specifically after. just how curious year next dock the on should

Mark Kempa

Yes, Conor.

you and advantage fleet, size said of of we've to as our if terms we normalization most our shutdown But going same the year drydocks it's the to of 'XX, is at think ships. you a before, fleet 'XX you're of forward, composition I look, level go of the really 'XX, So the as whether this our about took during the look see drydock 'XX, say a of size couple or points. might It go of of just docks cycle going down few I back normalized the up days, a not a the step more to dry fleet. going any up next be there's our or as a points couple shouldn't into go given up might forward for we get -- years. no, but material step or down It few in

Operator

next of comes the Our question line Montour from Brandt Barclays. with

Mark Kempa

try again Brent. on we'll Well,

next the to go Let's question.

Operator

next question the from the Truist will come And Patrick with of Securities. line Scholes

Charles Scholes

year-over-year, in why what's your like to color, trade. were out book on of first ticket XX% crews follow-up It the My Is driving little in color -- give Can X%. others looks in a typically though question increases transportation concerns commissions commissions, there? to it book mix please? and I'll up Great. or you More And question. were more revenues up then have the paid that divergence will change direct? a the direct new

Harry Sommer

Patrick. Thanks, Yes.

we're Let It's seeing no, not a me in start more in driven mix. the airline. reflection changes of really again. changes what direct passenger by or is significant

air we year-to-year down. a bit cost the goes shifts a package as air cruise And air year, X brands. versus buying across [ of that little our we're ] and component know rate participation better year this also, You line, last as all

slightly year-over-year a little new and for a of air combination trade, more substantially the air it's versus the remained brands. buying we direct than cruise us last rate participation across bit has year. lower to But our general So efficiently did same

Charles Scholes

also in period. are for if year the the fact, for same how last granularity say, then year-over-year. And book Can last year comparable ahead you for Interesting. And much on about your year? Okay. of bit a year you percentage-wise, same versus more you up the how the you've much rest are little then time position talked or the time ahead versus, significantly give ahead, whatnot next

Mark Kempa

if our you had Look, Yes, Patrick. generally prior XX-month is, at XX% can said exact or forward I our an I in won't that should we What to basis XX% to our speaking, sweet you tell a time, spot we somewhere calls, percentage. on given give refer is remarks on any say.

fact any And other who willing percentages that, to who than up reference, on it there, consumers pay the very and that prices. from to could won't we are see to consumer, specific that further from be book continue so higher if you out but a are willing of think strong give we I

demand. that environment lends all I So continue this to to capitalize think on a to of itself great

Charles Scholes

say Are your book you say for percentage, is a versus comparable -- can for this can ahead you were you your a -- where year? year giving you ago position without

Mark Kempa

you comment line which bookings said, QX about we should QX other they would on But believe Harry forward Well, -- I months, if of that include our in than imply the think as be. we are with our is won't would year think XX expectations rest where ahead. the

Harry Sommer

benefit additional as cabins our selling little elongate the give higher a year Europe. we've to which locals booking is that only our to little slightly a had those on more year, deployment to deployment opposed QX, to to a the Americans this tends -- also is related QX large in curve where because closer in full we're this of booking The and I'll Europe, part cycle, tends which of color the seeing yields and deliver European a bit

Operator

with Mizuho. of the line question Chaiken next from Our Ben comes

Benjamin Chaiken

booking on very yields all trends comments helpful. forward onboard XQ are Your

yield some this net guess XQ There I'm could great side. for how about tailwinds, attacking a are little specifically asking. on parts, thinking moving think Just us differently. if the help you're it'd and headwinds I XQ, Curious yields you be different about the

earlier, a less factor. [ but it example, you've as not like Caribbean, there is for ] sounds is the mix suggested So

and finer else cut it a like You've step I'm trying sequentially, 'XX to put just maybe seems you picture? open Anything there's And to big Sea. parts. the understand just guess it and got Red a point moving up down, on this I versus it, year-over-year optically, however

Mark Kempa

I from same the a down that's comparison purely QX, step think as but Well, is in result XXXX. of there a quarter the of

are we said our and that and on across many say call, more not, I are know times conferences. call calls we can and not will we repeat seeing this, So last this I how different as deceleration. don't I

We have we our we a which said back would terms yield what normalized in of more we be the business, would to always in mid-single are growth somewhere to call getting digits. low

And obviously, pursue we much to continue that. better than

East absent the is there to an impact growth. yes, continue QX still we've yield about and pricing that, specific Red both very and Sea, result Middle So a healthy But even very see in QX and that. as we been of

to is a just issue. It from I So deceleration to want really clear. make it a quarter. quarter comparison not It's issue

Benjamin Chaiken

Sure. premise actually was a was that not of The said in that deceleration. It past. the you've question the

parts to the I'm us So nuances, explain helpful. of help kind trying understand that that's the moving might but

Mark Kempa

same for the really also in a East . are the impacts in and XXXX. parts QX Sea quarter Red the as having Mid part, versus moving and that the rollover as significant Then well QX QX most

Benjamin Chaiken

construction, of before you of under is in lot that and the that the Or Stirrup to to as Okay. start a the your sense. built announced wait wait Cay, you then be Great correct the so you Were demand you the picture suggesting kind in interpretation? about the a not pier pier get And belt then call makes to island? earlier for which invest think year or you

Harry Sommer

and pier, island, that pier, have view us my long-term was to was I have [ is Great I'm gating pier experience. we'll Stirrup talk to X not meant I'm us that before been have not little for towards record, wouldn't the the more now ] to way. additional comment the it make allows a for item the more weeks. we to investments that But the schedule long-term great the slightly say in substantial that. that have here interpret it for Cay, prepared prudent a discuss full our plans that bit for would to committed already about -- we which it a just

indication don't more bit I of give happening want about But any We'll that imminently weeks. or talk it's little X to whether in later.

Operator

next line with Our Dove from Liz question Goldman Sachs. comes of the

Elizabeth Dove

Hawaii XQ want would higher, think X.X% being the kind yield kind have terms I that XQ, that would belabor I guidance To but this quite year. comp down point, your say moving of in about means quarterly can XQ kind I especially can pieces maybe step as to Anything thought in of quarterly of kind that get the help occupancy recovery you understand and have of some the we Like net last from think of a steep of just cadence? you cadence. of me thought growth

Mark Kempa

half at you quarter the think yes, will the roll in somewhere look we occupancy maybe about to of result last impact of that's X% of quality Fourth and XX% as But rolling I zone XXXX, said, third there I if the XX% -- a think over. growth year, on very if Hawaii. we a be correctly, comp recall to fourth highest small in was over, we Lizzie, as a pricing I back think again, quarter. yield quarter, the comp believe as there the was quarter year, yielding

tuned. think I stay So

I the healthy, all quarter, still there's today, see think there. environment But time across and we quarters. we we're results fourth expect still we building our and remains everything -- strong

Harry Sommer

which to color XXXX. had less, excuse -- it have on so me, mean for headwind sale. more would bit cancellations to us question I this I'll Yes. a well this more an a to QX bit we voyages little of only why the time critical in for And that's than little was a ahead one replacement not because the in get additional headwind Sea is which Red little talked and about related QX, the be add, a Mark earlier in slight

wouldn't already in our [indiscernible] all the half so canceled and the of voyages of gone our challenges XXXX same headwind for we've Red Sea to XXXX So that growth. the have all crossings first 'XX previously we have that

Elizabeth Dove

in might share your targets? some Or premium this helpful. Anything terms the That's the protect step pretty more it share? can versus is luxury also feels premium the focused, has on supply to capital there of take markets is any you activity. brands Norwegian pricing growth really more And And it Perfect. brands? especially competitor market aggressive like with very

Harry Sommer

that trying some thoughts to I'm mind. distill down question into So in my

has anything So We market. positive think more market to this you excellent for new and us. opportunity public represents -- into excited is we're obviously, entrants that will, the the if the that to all focused, of and cruising draws see that market

wish and growth we So morning has, Oceania that on I region growth this the him we're absorb brand and IPO, obviously congratulating and on for. successful [ that we that we Viking a We happy can measured that's sent luck. [indiscernible] nice the have the of see best

Operator

Wightman comes Our the next question Wolfe from line of with Fred Research.

Frederick Wightman

-- if year. I it's expecting I just come year? costs? to Sea repositionings you this is wanted yield Are impact desirable to next to on do the have if from Was for yield fully just comment the you -- to back dilutive that do a that from to impact less understand a Red and a want itineraries? offset it's comment

Mark Kempa

with Sea earlier cycle exception, you may you believe on half 'XX for brand. still reroute sailings. cancellations that, have East better our thinking canceled sale there Mid we the we from all the create I Apart one the sailing those have the back so for better Red the of have. obviously, sales Oceania itineraries, those the have and and is, itineraries we announced in XXXX, of Fred, And all

won't but But won't certainly, Sea, the point, a premium. select the So a world choice are improved the be That won't that that garner a said, can Certainly, certainly, Red it in at be it from drag. economics significant Mid-East the same I improve. -- those areas always you of doing significant -- had and other versus yield a tailwind, it those if should and

Frederick Wightman

some an there would throughout understand saying potentially where That's then could from potential come upside for sounded you yields trying Okay. be in question were largely year. like upside fair. It And to earlier the onboard. response just to the that

that to response Caribbean about take price back half like right? exposure yields from you the XQ grow in a XQ when increases mean specifically. year, in and thinking guys to the was the later feel in year, the that just have ticket ability think of perspective still But I especially you again? I

Harry Sommer

Yes.

the we that's we can consumer to brands. look and raise everything do can. our of Fred, We we booking job So that any curve, demand, the at price the time at

potential. Mark where mentioned, the as we of and that to are there potential that given is in in optimize everything think Absolutely, can most do we I QX curve. we'll QX booking Is pretty big, QX? and

Operator

next our question UBS. line And comes from Robin the of with Farley

Robin Farley

change showed to X have million in release, in your percent would a is, you I add EBITDA. net that questions. yield One about $XX

EBITDA just point raised half well, that half and that, due $XX higher X that to but ] higher fully previous is that conservatism at fuel [ of like just yards Maybe the sort all there ship that's the was understanding as your to way. us is was quantify it is million. some new fuel. of of to looking the by per raising then to there there -- can looks I and second another orders by there orders, fine? getting Maybe to cost color factor You you that that not of the my $XX leaving it's birth for of kind the line. any trying million the of EBITDA relative be half in of ship Or like inflation from on terms or question, just -- dry, down And other and -- would in of give just Is -- other little powder not which sort raise. EBITDA in your a kind that

Mark Kempa

your Thanks at in rounding some Yes. when there's look the and for sensitivity. there exact slight you Robin. yield calculations, the Obviously,

of that the for related fixed, newbuild fees you portion X%, not And yes, was increase. some Number we over went but that higher one, is which is look reasons. of XXX partially then announcements prepared fuel also -- basis portfolio X%, as effective debt was interest that commitment expense of about that well. our of if and as about our carry X to by some point remarks, most essentially, higher then So did offset I my think at --

back All we're $X.XX in apologize. interest yield the $X.XX, all, $X.XX, as back year, of in raising $X.XX I of look -- half fuel. by And that's you said, I think the your when didn't the of $X.XX end or offset and I at I catch about guidance, question.

Harry Sommer

color She inflation. asked about any on

Robin Farley

the the there, a costs Yes, that about berth but And change it. to on per understand in the looking of cost the will was the [ for to prior a yards, extra expense be ] anything trying just understanding getting ballpark there the get of or have interest $XX at EBITDA. impact on EBITDA. inflation for cost the the [ EPS. ] questions kind I fully million sense been per the I in building berth But

Harry Sommer

Just clear that EBITDA on we at had raise side, really to calculated X% we the just be over the million. $XX

full like point. So a It something it wasn't XX more exactly was basis that. points or like

should XX you the range. million exactly So $XX fuels to EBITDA get the minus the almost

that So see and we each inflation million. you'll million -- factors in of apologize is sort $XX for terms of Listen, think X on offsetting other. I $XX the confusion between what newbuilds,

we similar the our do least inflation general see is when think at on inflation in population, you to the I the calculations. newbuild

more that things seeing efficiently of all of and structure, to not offset transformation inflation, I us cost allow process our of impact think we will can same certainly to doing the to is what what in offset as that do inflation you're same it. help general the the office looks part effectively

So question, last that then I you have we for will, think guide, operator. one would forward. be going time our if And

Operator

from with the Hardiman of And our line Citi. last James question will come

James Hardiman

Obviously, the dry that quickly dry to though So for how the just noise that pretty of dry last, in for that around first are conversation. dock, second as I dock if year-over-year. back wanted half. flattish, circle And the so, can Is cost dry XXXX. going the long to to dock step-up lot ex be assumption docks ex particularly costs out movement the half the flattish pretty flatten a

Harry Sommer

the essentially of that is the back you year. for answer and as the to making, team dry dock, excluding efforts really that 'XX at not half believe be the We're flat, of mentioned comment point. yes. on quick are proud very We beyond cost the this the So will prepared

Mark Kempa

leveraging is, add permanent not scale, a that. again, James, we our I we exercise. This to activity and about continue have would talked laser all focus to do rightsizing a we for a is have us, on that onetime

obviously, relooking had while you today. experience to are business, without gets opportunity stream believe out at a facet go, further that guest delivering down the every our of we what there it just So continue better there's we've product and than and we the harder all impacting actually

Harry Sommer

to what in strategy call, Well, all Thank want very share when our while today, much. we guest of all time am experience. set and forward thank I targets a a on May about looking really to operating for improve I margins you I you continuing our and talking for delivering the to [indiscernible] of wonderful fantastic meet your XX. comments long-term

Operator

you. concludes today's Thank This conference.

of your Enjoy time. this lines your You the rest may at now day. disconnect

Norwegian Cruise Line (NCLH) 1 May 242024 Q1 Earnings call transcript