NCL reports third quarter profits!

[electricron]

Read this NCL press release:

http://www.ncl.com/nclweb/pressroom/pressRelease.html?storyCode=PR_111306http://www.ncl.com/nclweb/pressroom/pressRelease.html?storyCode=PR_111306

 

Excerpts:

NCL reported net income of $49.0 million on total revenues of $592.3 million for its third quarter ended September 30, 2006. This compares to net income of $41.2 million on total revenues of $495.0 million for the third quarter of 2005. Net income for the third quarter of 2006 included $7.3 million in connection with a settlement agreement for the remaining portion of our claims against the builder of Pride of America.

The third quarter of 2006 represents the first full quarter with three vessels deployed in our inter-island Hawaii cruises. While the Company expects the stabilization of this fleet to ultimately result in cost efficiencies, the significant increase in capacity deployed in our inter-island Hawaii cruises represented a larger portion of our fleet in the third quarter of 2006 than in 2005, and this has therefore resulted in higher payroll and related expenses.

In addition, fuel prices in the third quarter of 2006 averaged $368 per metric ton, or an increase of 20% from the average price of $306 per metric ton in the third quarter of 2005. This increase in price contributed to a year-over-year increase in fuel costs of $10.1 million.

“Our rapid expansion in inter-island Hawaii cruises and increased fuel costs continue to impact our results,” said Colin Veitch, president and chief executive officer of NCL Corporation Ltd. “In the near term, we still have a challenging road ahead of us in Hawaii, but with the stabilization of our NCL America fleet we expect to achieve operating improvements in 2007. We are in the process of implementing measures to reduce crew turnover and accelerate the rate at which product delivery scores have been improving. Our international fleet, where the big new ships continue to perform well, will see further addition of new modern vessels, one in the fourth quarter of this year and one in the fourth quarter of 2007, and the departure of two of our older mid-sized vessels, one in the second quarter and one in the fourth quarter of 2007.”

The Company continues to feel the effect of rising interest rates on its floating rate debt of $1.3 billion. As a result of higher interest rates and an increase in average outstanding borrowings, interest expense increased approximately 37.2% to $34.6 million in the third quarter of 2006 from $25.2 million in the third quarter of 2005.

Bookings continue to be closer to the sailing date than at the same time last year. Through the first quarter of 2007, the Company continues to see downward pressure on pricing, especially in Hawaii and the Caribbean. As a result, for the fourth quarter of 2006, the Company expects Net Yields to be down approximately 1% compared to the fourth quarter of 2005.

 

That's a $49 million profit after paying higher wages for three crews of Americans, higher fuel bills, and higher interest charges. Not bad!