Norwegian Cruise Line Holdings said winter bookings were
very strong, but first-quarter net income dropped 15%, chiefly due to higher
maintenance and repair costs.
In a conference call with analysts, company CEO Frank Del
Rio said the quarter was a solid start to the year.
"This was the best Wave season that we and the rest of
the industry have seen in a long time," Del Rio said.
Norwegian is in a better booked position, at higher rates,
than at the same time last year. Del Rio said European bookings in particular
have been in demand, even as NCLH increased capacity by transferring the
Norwegian Getaway from the Caribbean to the Baltic for the summer. In the
second quarter, 27% of NCLH capacity is in the Caribbean and 30% in Europe.
He said new itineraries to Cuba a performing "extremely
well" in both booking volume and pricing, a start he called "very
encouraging." Next year,
itineraries that feature a call in Cuba will represent 2.1% of NCLH capacity,
Del Rio said.
The only discouraging development was a pause in bookings by
Chinese wholesalers in March, April and May, when NCLH had to re-arrange guests
on new itineraries when cruises to South Korea were put off limits by the
Chinese governmen.
NCLH isn't scheduled to begin sailing its first ship
dedicated to the Chinese market until late June, when the Norwegian Joy arrives
in Shanghai. Del Rio said it built some conservatism into its financial
projections because of a lack of operating history in China.
First-quarter net income was $61.9 million, down from $73.2
million a year earlier. One reason for the reduced profit was the cost to tow
and fix the Norwegian Star. The ship lost propulsion on Feb. 10 and had to be
towed to Melbourne, Australia, for five days of repairs. Norwegian didn't put a
dollar figure on the repairs.
First-quarter revenue rose 6.8% to a record $1.15 billion,
partly on the addition of two ships: Oceania Cruises' Sirena and Regent Seven
Seas Cruises' Seven Seas Explorer.
NCLH raised its full-year forecast for adjusted net income by
roughly $9 million, to a range of between $860 million and $883 million.
Adjusted net income in 2016 was $776.3 million.