CRUISE INDUSTRY

Norwegian posts improved third-quarter profits

 

hsampson@MiamiHerald.com

Buoyed by the performance of its newest ship, Norwegian Cruise Line Holdings reported higher revenues and profits for the third quarter Monday afternoon.

The positive earnings report provided more good news for the cruise industry, which has faced rough waters since early last year. Last week, Royal Caribbean Cruises Ltd. posted results for the quarter that were better than expected.

Norwegian, with a fleet of 12 ships, reported revenue of nearly $798 million, an 18 percent increase over the third quarter of 2012. Net income increased more than 33 percent to nearly $171 million.

Net yields, or the net revenue per capacity day, increased 4.1 percent thanks to higher cruise fares and increased passenger spending on board.

Capacity days increased by nearly 15 percent compared to the previous year with the addition of the 4,028-passenger Norwegian Breakaway, which launched in May. Sister ship Norwegian Getaway starts sailing year-round from Miami in February.

Kevin Sheehan, president and CEO of Miami-based Norwegian Cruise Line, called the results “fantastic.”

“I think Breakaway had a very solid quarter,” he said. “On top of that, we were very pleased with all of the other ships.”

The company exceeded expectations in Europe, where four ships were based for the summer, Sheehan said. Because of economic instability in the region, cruise operators have struggled to command strong prices for Mediterranean sailings in recent years.

Worldwide, the industry has struggled following a series of high-profile incidents that cast cruising in a negative light. The Costa Concordia wrecked off the coast of Italy in January 2012, killing 32. And earlier this year, fire disabled the Carnival Triumph in the Gulf of Mexico, leaving passengers in uncomfortable conditions for several well-publicized days. A less serious fire followed on Royal Caribbean International’s Grandeur of the Seas in May. Where demand dropped amid negative coverage, industry players were forced to lower prices in order to fill ships.

“The good thing is that our pricing today is above where it was before the economic downturn,” Sheehan said. “And we’re very focused on continuing to ratchet up our pricing level.”

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