The Norwegian Cruise Line Holdings Inc. (NCLH) cruise group was the most affected by the cancellation of cruises during the COVID-19 coronavirus, losing more than 54% of the over the past year. Now that mass vaccination in the United States and Europe has begun, there is greater confidence in the possible recovery to ordinary social life and the revival of the tourism and leisure sectors.
Norwegian Cruise Line’s benefit is its small size. The organization actually has less than 30 boats in its fleet, which means it will need fewer visitors to fill it. At the same time, investors do not expect financial metrics to rebound quickly, as Norwegian Cruise Line expects to keep rates at pre-pandemic peaks throughout the new season. Also, after the coronavirus outbreak, the debt of the Norwegian Cruise Line increased.
From $6 billion at the end of 2019 to $10.5 billion at the end of the third quarter, long-term debt rose by 75 percent. Compared to last year, the interest costs more than doubled to $139 million. The outstanding shares of Norwegian Cruise Line have risen from 214.8 million to 271.4 million. Dilution would damage earnings per share in the future until the business is eventually able to show earnings.
Norwegian Cruise Line, however, relies on high deferred cruise demand. As the smallest cruise ship operator, Norwegian Cruise Line needs less time to rebound than rivals. To achieve maximum potential, it can better handle bookings and plans to maintain its strategy of rising prices by an average of 3-4 percent.
Thus, the overall outlook for the Norwegian Cruise Line is more promising than previously believed, considering the tough business condition and the effects of a range of negative factors.
The share of Norwegian Cruise Line Holdings Inc. (NCLH) was worth $26.42 with a rise of 7.35% in the trading session on January 14.