Norwegian Cruise Line (NCLH) Recent Push, What to Make of it?

Norwegian Cruise Line just like other cruise companies including Carnival and Royal Caribbean made strong progress in the market on Thursday, following the announcement of the re-opening of Carnival’s Europe-based cruise brands.

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Norwegian Cruise Line Holding (NCLH) rose significantly during yesterday’s trading session before closing at $17.63. NCLH traded day’s high at $19.08 as of 9:48 A.M. after kicking off the trading session at $17.66.

The cruise ship stocks climbed on Thursday right after the news broke out that Carnival is resuming its Europe-based Costa Cruises. Investors took this news as a joy, as the voyages seem to recover in the cruise ship industry after a long-lasting lockdown caused by the ongoing pandemic. The COVID-19 impact has cost billions of dollars to the cruise industry; however, things are starting to come on track with the announcement of Carnival resuming its cruise operations later this weekend.

Presenting the future outlook for the remaining year, NCLH mentioned that it is not easy to estimate the financial and operational condition in both near- or longer-term due to the unprecedented economic scenario. However, the company anticipates recording a net loss on both GAAP and a non-GAAP basis for the upcoming third quarter that will end on September 30, 2020. In the second quarter report, Norwegian Cruise Line Holding stated:

“The COVID-19 pandemic has had a significant impact on the Company’s financial position and results of operation. If the temporary suspension of sailings is further extended, the Company’s liquidity and financial position would likely continue to be impacted.”

By the end of second quarter, the company’s aggregated debt position was approximately $10.3 billion, along with cash and cash equivalents of $2.3 billion. In July 2020. NCLH closed on a series of capital markets transactions to further bolster liquidity and extend its debt maturity profile.

Recording a massive rise in demand, oversubscription, and the company attained gross proceeds of $1.5 billion from full exercising of ordinary shares and partial exercising of exchangeable senior notes.

Sudden Stock Push, what to make of it?

The recent second quarter recorded the worst financial performance in Norwegian Cruise Line’s history, all of the operations of the company were on a pause with all its ships docked in various ports around the globe. The Q2 2020 revenues dropped by almost 100% year over year, below the consensus estimate by $6.24. The company recorded a net loss of almost $715.2 million, whereas, the adjusted EBITDA was -$393.1 million for the three months period.

The COVID-19 has made the financial as well as operational progress vulnerable for many companies as they have had no clue rather than waiting for things to get normal. The recent news of Carnival resuming its operations has boosted the cruise industry, despite that things have not yet settled down and the recovery of heavy losses incurred during these times would take years.

Norwegian Cruise Line Holdings (NCLH) is still unsure about its future financial prospects as the ongoing pandemic seems to stay longer.

Market Overview

The cruise stocks seem to surge with some good news in the market. Norwegian Cruise Line Holdings (NCLH) is currently trading at $18.27, up by almost 4% as of today at 9:55 A.M. EDT.