Wednesday, August 5, 2015

Norwegian reports higher 2Q profits, hints at Cuba and China plans

Norwegian reports higher 2Q profits, hints at Cuba and China plans
BY HANNAH SAMPSON
hsampson@MiamiHerald.com

Norwegian Cruise Line Holdings has the cruise industry's hot spots —
Cuba and China — in its sights.

The Miami-based cruise operator revealed during an earnings call with
analysts Tuesday that executives expect to decide "in short order"
whether to devote a ship to the China market, as its competitors have done.

And the company, which owns the Norwegian Cruise Line brand, as well as
Oceania Cruises and luxury Regent Seven Seas Cruises, has applied for
approvals from the U.S. and Cuban governments to operate sailings to Cuba.

"In terms of how quickly we can deploy a vessel, suddenly, the
availability of vessels comes into play given how far in advance we're
booked," said president and CEO Frank Del Rio. "It's going to be a nice
problem to have to find a vessel you move from an existing deployment to
Cuba."

He said the first vessel to sail in Cuba would likely come from the
high-end Oceania fleet, whose ships are smaller than those sailed by
Norwegian Cruise Line.

"It's still very much a project that's in progress," Del Rio said.

He told analysts that the company is working to drive higher yields —
the amount passengers pay per day — by creating more diverse
itineraries. On Monday, Norwegian announced that it would send the
Norwegian Star to Asia, Australia and New Zealand in late 2016 and early
2017.

"As a contemporary product, we fully understand that the Norwegian brand
is positioned differently in a marketplace, and as such, is not expected
to reach the same level of diversification that Oceania or Regent
enjoys," Del Rio said. "What we do know is that the Norwegian customer
wants to see the world as much as an Oceania or Regent customer does,
and we continue to evaluate other opportunities to offer our guests a
broader portfolio of destinations."

Norwegian Cruise Line Holdings acquired Prestige Cruise Holdings, the
parent of Oceania and Regent, late last year. In its report Tuesday, the
company compared quarterly earnings this year for the combined company
to second-quarter earnings for Norwegian Cruise Line alone in 2014. A
spokesman said raw numbers that included the performance of Oceania and
Regent in 2014 were not available.

For the quarter that ended June 30, the company reported net income of
$158.5 million, up from nearly $112 million the year before. Revenues
increased from about $766 million to more than $1.08 billion.

While adjusted net income of 75 cents per share beat analyst
expectations, revenues came in slightly under what Wall Street had
forecast. Shares of the company closed at $59.43, down more than 4
percent compared to the previous day's close.

Source: Norwegian reports higher 2Q profits, hints at Cuba and China
plans | Miami Herald -
http://www.miamiherald.com/news/business/tourism-cruises/article29947641.html

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