NCLH burning through US$160 million a month amid pandemic

NCLH burning through US$160 million a month amid pandemic

MIAMI — NCL parent company Norwegian Cruise Line Holdings says its cash burn rate is US$160 million per month as it waits out the COVID-19 pandemic.

NCLH, which also owns Oceania Cruises and Regent Seven Seas Cruises, posted its Q2 results yesterday. Like all cruise companies it has been severely impacted by the pandemic and the resulting travel restrictions.

Earlier this week CLIA announced that its ocean-going cruise line members had extended their voluntary pause in operations to Oct. 31, two weeks after the CDC announced the extension of its No Sail Order for U.S.-based cruise ships to at least Sept. 30.

NCLH says that while booking volumes since the emergence of COVID-19 remain below historical levels, the company’s overall cumulative booked position and pricing for 2021 are within historical ranges, including bookings made with future cruise credits (FCCs).

The company says approximately 60% of NCLH passengers impacted by COVID-19 cancellations have requested cash refunds. Advance ticket sales reached $1.2 billion as of June 30. About $0.8 billion of that is attributed to FCCs.

“In recent weeks, we have taken further action to bolster our liquidity position in response to the COVID-19 global pandemic, including our highly successful $1.5 billion gross triple-tranche capital raise in July, which we believe positions us to withstand a scenario of prolonged voyage suspensions,” said Frank Del Rio, NCLH’s President and CEO.

“Our guests continue to demonstrate their desire for cruise vacations in the future. Looking ahead, we made significant progress in our Roadmap to Relaunch with the formation of our Healthy Sail Panel, comprised of globally recognized public health experts, which is tasked with providing recommendations to advance our public health response to COVID-19 and inform us on the development of a science-backed plan for a safe and healthy return to cruising,” Del Rio added.

In May NCLH announced it had secured more than US$2 billion of additional liquidity, to help shore up the company amid the COVID-19 crisis. The move came shortly after NCLH updated its filing with the U.S. Securities and Exchange Commission with what amounted to a warning about its solvency.

For Q2, NCLH says its revenue has dropped to $16.9 million compared to $1.7 billion in 2019, due to the complete suspension of sailings in the quarter. The GAAP net loss was $715.2 million, while the adjusted net loss was $666.4 million.

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