Revenue rises, but IPO expenses put Norwegian Cruise Line in the red

By Tom Stieghorst
Norwegian Cruise Line posted a $96.4 million first-quarter loss, but said accounting rules that require it to recognize some one-time expenses masked a solid improvement in its business.

Revenue rose to $527.6 million from $515.4 million.

Norwegian said that without $110 million in expenses related to its public offering in January, income would have been $12.9 million. Norwegian's net profit was $3.3 million in last year's first quarter.

“We had a fantastic quarter — above consensus,” said CEO Kevin Sheehan in an interview.

The expenses include costs tied to prepaying bonds and stock compensation for former executives.

Sheehan said by using the proceeds of the public offering, Norwegian was able to replace secured debt that carried 11.5% interest rates with unsecured debt that costs about 5%.

Norwegian raised $447 million in the quarter by selling 23.5 million shares for $19 each.

Excluding fuel, net cruise costs fell 1.5% in the quarter. Sheehan said the expense of introducing Norwegian Breakaway will likely raise cruise costs by 5% to 6% in the current quarter.

The New York-themed Breakaway is set to arrive before daybreak on May 7 at the Manhattan Cruise Terminal. The ship will be named the next day by the Rocketttes before starting a series of seven-day cruises to Bermuda.

Follow Tom Stieghorst on Twitter @tstravelweekly.
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