Norwegian Cruise Line Approves $1 Billion Share Repurchase Program

Norwegian Jewel

Norwegian Cruise Line Holdings today announced that its Board of Directors authorized a three-year, $1 billion share repurchase program.

The company said it may repurchase its ordinary shares from time to time, in amounts, at prices and at such times as it deems appropriate, subject to market conditions and other considerations.

Norwegian said it may make repurchases in the open market, in privately negotiated transactions, in accelerated repurchase programs or in structured share repurchase programs, and any repurchases may be made pursuant to Rule 10b5-1 plans. The program will be conducted in compliance with applicable legal requirements and will be subject to market conditions and other factors.

“The $1 billion share repurchase program authorization reflects our ongoing confidence in our financial strength and the long-term outlook of our business,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “Our strong and growing cash flow will allow us to deepen our commitment to provide returns to our shareholders while continuing to invest in our product, innovation and growth.”

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Norwegian’s Del Rio sees room for expansion

Norwegian Cruise Line entered the Chinese market last year with the Norwegian Joy.Norwegian Cruise Line Holdings CEO Frank Del Rio told analysts that his ships were “in the right place at the right time” in 2017 but admitted that there were plenty of spots on the map he’d like to cover with new ships.

“We have so many markets that are unserved by us or grossly underpenetrated by us,” Del Rio said in a question-and-answer session with analysts to discuss fourth quarter and 2017 earnings in February.

“We don’t have a presence in the Mid-Atlantic states,” he said. “We’re not in Baltimore. We’re not in Charleston. We don’t have a presence at all in the world’s second-largest port, which is Fort Lauderdale.”

And the list kept growing.

“We don’t have a presence in the Gulf states of Texas or Alabama,” he said. “We don’t have a year-round presence in Tampa or New Orleans or Los Angeles. We only have three ships in Alaska, which is a very high-yielding market. Some of our competitors have up to eight vessels.”

Del Rio said that given the fleet size and the company’s intention to build only one new ship a year for its Norwegian Cruise Line brand, it could be a couple of years before he would consider adding a second ship in China, because, although profitable, it was not a banner year in China in 2017.

“I don’t think China is hitting on all cylinders as it can,” he said, referencing the continued tensions with South Korea and the resulting uniformity of short cruise itineraries, which only visit Japan.

Del Rio said that the Wave season for 2018 started strong and the company’s outlook is bullish, driven by a strong economy and consumer demand.

“Our overall booked position during the first seven weeks of 2018 further improved compared to the same time last year,” he said.

In addition to Norwegian Cruise Line, NCLH owns Oceania Cruises and Regent Seven Seas Cruises. The three lines operate a combined fleet of 25 ships with some 50,400 berths, offering itineraries to more than 450 destinations.

On average, guests of NCLH brands are booking five weeks earlier than they did at the end of 2016, Del Rio said.

NCLH net income rose 23% last year, to $780 million, as European pricing and bookings recovered faster than expected and the booking curve extended to a near-optimal length.

Revenue rose 10.7%, to $5.4 billion.

Norwegian Cruise Line Holdings’ momentum accelerates into 2018

Norwegian Cruise Line Holdings’ net income rose 23% last year to $780 million, as European pricing and bookings recovered faster than expected and the booking curve extended to a near-optimal length.

Revenue rose 10.7%, to $5.4 billion.

The Wave season for 2018 has started strong and the outlook for 2018 is bullish, driven by a strong economy and consumer demand, CEO Frank Del Rio said.

“This year is by far the most excited, the most energized and the most optimistic I have ever been at the start of a new year,” Frank Del Rio said.

He said the strong demand environment of late 2016 and 2017 has “accelerated through this year’s early Wave season, as both the number of bookings sold and the price points achieved reach record levels” across all three brands — Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania Cruises.

“Our overall booked position during the first seven weeks of 2018 further improved compared to the same time last year,” he said.

He said on average NCLH guests are booking five weeks earlier than at the end of 2016.

Del Rio said the weak link if there is one, is China. “I don’t think China is hitting on all cylinders as it can,” he said, referencing the continued tensions with South Korea and the resulting uniformity of short cruise itineraries, which can only visit Japan. Nevertheless, he said China was profitable in 2017.