L Catterton makes significant investment in AmaWaterways

L Catterton, a leading global investment firm, today announced that it has entered into a definitive agreement to acquire a significant stake in AmaWaterways, a global luxury river cruise line, from a consortium of investors led by Certares. L Catterton joins founders Rudi Schreiner, Kristin Karst, and the Murphy family, all of whom remain committed to supporting the Company's long-term growth and innovation in the river cruising industry and will continue to have meaningful ownership in the Company.

Founded in 2002, AmaWaterways is a leading river cruise line with a rich history of curating unforgettable travel experiences for guests alongside their travel advisor partnerships around the world. With itineraries exploring the world's most iconic rivers in Europe, Asia, and Africa, AmaWaterways customers can enjoy tailored experiences across its fleet of innovatively designed vessels. The Company provides a unique onboard experience including impeccably designed, spacious suites, regionally inspired cuisine using locally sourced ingredients, and a wide array of wellness and entertainment experiences, as well as best-in-class customer service and diverse shore excursions to explore each destination.

"This is an exciting new chapter for AmaWaterways," said Rudi Schreiner, co-founder and CEO of AmaWaterways. "L Catterton brings unique insight into today's customers, as well as exciting ideas on how we can work together to capitalize on a number of growth opportunities across our business. They share our passion for innovation and an unwavering commitment to creating unparalleled guest experiences. We look forward to working with them to continuously expand and enhance our river cruise portfolio for our customers."

"As consumers' desire for unforgettable luxury travel experiences continues to grow, we understand the importance of creating highly curated and memorable opportunities for guests to see the world," said Marc Magliacano, co-Managing Partner of L Catterton's Flagship Fund. "We look forward to leveraging our global network and deep expertise across travel to identify new growth opportunities and thoughtful expansion initiatives, while empowering the innovative and pioneering spirit that has driven AmaWaterways' success over the last two decades."

"The Company continues to delight both guests and their cherished travel advisor partners, driven by its commitment to delivering first-of-its-kind ships, high-quality dining, wellness offerings, and exciting excursions to create an unmatched immersive experience," said Jennifer Reid, Partner in L Catterton's Flagship Fund. "Rudi and Kristin are true visionaries. Along with their passionate and committed team, they continue to set the industry standard for personalized customer service and innovation. We couldn't be more excited about this partnership; together we will continue to provide a distinct, luxury travel experience in many of the most sought-after destinations across the world."

"AmaWaterways is a truly special company – we deeply value and appreciate the opportunity we have had to partner with Rudi, Kristin, the Murphy family, and the McGeary family," said Colin Farmer, Senior Managing Director and Head of the Management Committee of Certares. "We are extremely proud to have had a role in AmaWaterways' growth over the last many years, including the significant additions to the company's fleet, entry into new cruise destination markets, enhanced relationships with travel advisor partners, and expanding upon the innovative and extraordinary experiences AmaWaterways provides its guests daily. We wish our partners and everyone at the company nothing but continued success in this next chapter."

Cruise lines increase the number of calls in the Baltic Sea’s eastern ports

In 2024 several Baltic ports expect an increase in the number of calls compared to last year. Cruise Baltic’s newly published Market Review reveals that more cruise lines will return to ports in the eastern part of the Baltic Sea region in 2024. In addition to this, several ports, including smaller and upcoming cruise destinations, expect an increase in the number of calls this year compared to last year.

Travel trends as well as geopolitical conflicts are affecting cruise itineraries in the Baltic Sea region. Cruise Baltic has just published the cruise network’s annual Market Review, describing how the Baltic cruise sector has been affected and developed over the last year.

2023 has been characterised by a divided region due to the geopolitical situation. This has caused a decrease in the number of calls in the eastern ports, while the contrary has applied to the western part of the region. However, among the emerging trends for 2024, the cruise network reports that more cruise lines have regained interest in eastern destinations with Klaipeda anticipating the number of calls to increase by 41%, Gdansk by 90% and Turku by 133%.

“Last year’s situation called for a new and strengthened narrative for our region. This, combined with our new strategy, enabled us to redefine and retell the story of the Baltic Sea region. The aim of our work is to support our members and push the positive development in the region in every way we can,” says Klaus Bondam, Director of Cruise Baltic.

In addition to this, Cruise Baltic also reports a general increase in the size of vessels deployed in the region, a rising interest for cruises with smaller vessels and a changed pattern in the number of calls that will be received by each port. Among the cruise ports expecting more calls and cruise guests are both popular cruise ports and smaller and upcoming cruise destinations, like Arendal where they expect an increase in calls by 77%, Nyborg where the number of calls is expected to double and Helsingborg where they expect to increase calls by 125%.

“We’re very pleased with this development and to see the growing interest in several of our destinations. Cruise guests are, like all other travellers, on the lookout for new and unique experiences, and by promoting new aspects of our region towards the cruise lines, we stay relevant among our target group,” says Klaus Bondam, Director of Cruise Baltic.

Silversea's second Nova-class ship floated out at Meyer Werft

Silversea celebrated the float out of its second Nova-class ship, Silver Ray, at the Meyer Werft shipyard in Papenburg, Germany, on February 25. The float out marks a significant milestone in a ship’s construction, representing the project’s advancement into its final stages. Now nearing completion – approximately 15 months since Meyer Werft first cut steel for the ship – Silver Ray is scheduled to debut in the Mediterranean in June as the sixth addition to Silversea’s fleet in just three years.

After Meyer Werft’s skilled craftspeople cleaned Silver Ray’s hull, approximately 100,000 cubic meters of water flooded the dock over four hours and two tugboats repositioned the 728-guest ship from the vast construction hall into the neighboring harbor basin, where the docking out phase will continue. The team subsequently installed her funnel and radar mast. In observance of shipbuilding traditions, Captain Alessandro Zanello, Master of Silver Ray, welded a newly minted, commemorative coin to a wall on the pool deck – a symbol of good luck.

“With the float out of Silver Ray, excitement is building for the launch of the second ship in our pioneering Nova-class,” said Barbara Muckermann, President of Silversea. “We received such incredibly strong feedback on Silver Nova from guests, travel advisors, and members of the press following her launch in August 2023. Sustaining the wave of innovation that is driving our success, the launch of Silver Ray will strengthen Royal Caribbean Group’s unwavering commitment to delivering a lifetime of vacations for guests, with its industry-leading global brands.”

“Reaching the major milestone of the float out, we now approach the completion of Silver Ray. The Meyer team is now working on getting this beautiful ship ready for her upcoming sea trials,” said Thorsten Kroes, Project Manager at Meyer Werft.

Silversea’s Nova-class ships pay testament to Royal Caribbean Group’s commitment to delivering the world’s best vacation experiences, responsibly. With pioneering energy efficiency standards, Silver Nova and Silver Ray are 40% more energy efficient than required international standards and regulations. On board, guests enjoy the brand’s customary hallmarks of luxury with a range of enhancements, including all-new venues and unprecedented suite options, new Otium wellness experiences and amenities, and enrichments to the S.A.L.T. culinary program, with the introduction of the S.A.L.T. Chef’s Table. Both ships incorporate innovative design features that connect travelers with the outside at every turn, including roughly 4,000m2 of exterior glass, for deeper immersion into the destination.

Silver Ray will soon undertake a conveyance of approximately 32 kilometers (20 miles) down the Ems River to the North Sea ahead of her sea trials — a unique journey, due to the narrowness of the waterway. She is scheduled to enter service in June 2024, spending her inaugural season in the Mediterranean, before crossing the Atlantic in December.

Norwegian Cruise Line Holdings reports strong fourth quarter, returns to full year profits

Norwegian Cruise Line Holdings Ltd. today reported financial results for the fourth quarter and year ended December 31, 2023 and provided guidance for the first quarter and full year 2024.

Full year 2023 highlights:

– Generated total revenue of $8.5 billion, a 32% increase compared to the same period in 2019, with GAAP net income of $166.2 million, or EPS of $0.39 returning to full year profitability for the first time since 2019.
– Achieved Adjusted EBITDA of $1.861 billion in line with guidance of $1.860 billion and Adjusted EPS of $0.70, which is inclusive of a $0.07 foreign currency negative impact. Full year performance was driven by solid revenue growth and continued focus on cost reduction and efficiencies.1
– The Company’s ongoing margin enhancement initiative drove improvement in operating costs. Gross Cruise Costs per Capacity Day was approximately $301 for the year. Adjusted Net Cruise Costs excluding Fuel per Capacity Day was approximately $154, and 21% less than the same period in 2022. This represents four quarters of continuous year-over-year improvement on this metric.
– Occupancy was 102.9% for the year, in line with guidance of 102.6%, and total revenue per Passenger Cruise Day increased approximately 17%, or 18% in Constant Currency, compared to the same period in 2019.
– Announced a revamped climate action strategy including interim greenhouse gas intensity reduction targets of 10% by 2026 and 25% by 2030 compared to a 2019 baseline with intensity measured on a per Capacity Day basis.
– Successfully took delivery of three ships, Oceania Cruises’ Vista, Norwegian’s Viva and Regent’s Seven Seas Grandeur, the most deliveries in a single year in the Company’s history.

Recent highlights

"Expected refinancing of our $650 million backstop commitment from a secured to unsecured commitment. Additionally, as part of this refinancing, expected repayment of our $250 million 9.75% senior secured notes due 2028, our highest interest rate debt.
We have continued to see exceptional demand for our Norwegian Cruise Line brand, with bookings and pricing at higher levels than 2023 for all four quarters of 2024. Oceania Cruises and Regent Seven Seas Cruises also continue to see strong demand across all geographies with the exception of redeployed itineraries due to cancellations in the Middle East and Red Sea."

2024 outlook

– Entered the year at all-time high booked position and pricing for 2024 voyages.
– Net Yield is expected to increase approximately 5.5% as-reported and approximately 5.4% in Constant Currency versus 2023.
– In 2024 Adjusted Net Cruise Costs Excluding Fuel per Capacity Day is expected to be $159, increasing 3.4% in Constant Currency, which includes an approximately 325 basis points impact of increased Dry-dock days and related costs in the year. Excluding this, Adjusted Net Cruise Cost Excluding Fuel per Capacity Day would be essentially flat year-over-year.
– Adjusted EBITDA is expected to be approximately $2.2 billion, Adjusted Net Income is expected to be approximately $635 million, and Adjusted EPS is expected to be approximately $1.23, an increase of 76% over 2023 results. This Adjusted EPS takes into consideration ~516 million dilutive shares, reflecting the expected accounting treatment of our exchangeable notes.

“Norwegian Cruise Line Holding experienced a momentous year of growth and achievement in 2023. We successfully took delivery of three new ships, one for each of our brands, representing the most deliveries in a single year in our Company’s 57-year history. This important milestone showcases our dedication to innovation and commitment to providing exceptional vacation experiences for our guests,” remarked Harry Sommer, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.

“Looking ahead, we are determined to capitalize on our recent achievements and take advantage of the positive momentum and strong demand for cruise which resulted in turning the year at all-time highs in both our booked position and pricing. Our team is looking forward to showcasing our world-class fleet, delivering exceptional experiences, and surpassing the expectations of the guests we will welcome on board in 2024 and beyond,” continued Sommer.

Business, operations and booking environment update

The Company continues to experience healthy consumer demand and is at an all-time high booked position and pricing reflective of some of the best booking weeks in the Company’s history beginning with Black Friday and Cyber Monday. Additionally, onboard revenue per Passenger Cruise Day remains robust, up 20% in the quarter compared to 2019, with broad-based strength across all revenue streams. The Company’s advance ticket sales balance, including the long-term portion, ended 2023 at a year-end record of $3.2 billion, approximately 56% higher than at the end of 2019.

As a result of the ongoing conflict in Israel and the Red Sea, the Company cancelled and redirected all calls to Israel during the fourth quarter of 2023. As a result, Occupancy was 99.2% for the fourth quarter of 2023, and full year Occupancy was 102.9%, in line with guidance. Additionally, all calls to Israel and the Red Sea have been cancelled and redirected for the entirety of 2024. Prior to the conflict, approximately 7% of the capacity in the fourth quarter of 2023 and 4% of capacity for the full year 2024 expected to visit the Middle East3, predominantly on our Oceania Cruises and Regent Seven Seas Cruises brands. Prior to the recent cancellations, approximately 1% of 2024 capacity was expected to sail through the Red Sea.

Pricing growth in the fourth quarter was also strong with total revenue per Passenger Cruise Day up approximately 21%, with capacity growth of 17% compared to 2019. Total revenue was up approximately 34% in the fourth quarter versus 2019. Gross margin per Capacity Day was approximately $79 in the quarter. Net Yield growth was approximately 8.2%, or 8.6% versus 2019 on a Constant Currency basis, in line with guidance.

The Company once again demonstrated continued progress on its ongoing margin enhancement initiative and efforts to maximize revenue opportunities and rightsize its cost base. Gross Cruise Costs per Capacity Day was approximately $280 in the fourth quarter, compared to $311 last quarter. Adjusted Net Cruise Costs excluding Fuel per Capacity Day in the fourth quarter of 2023 was approximately $151, in line with guidance.

For the full year 2024, the Company expects Net Yield growth to be strong at approximately 5.4% on a Constant Currency basis compared to 2023. This growth is driven by exceptional demand for Norwegian Cruise Line with Oceania Cruises and Regent Seven Seas Cruises also experiencing strong demand across all geographies with the exception of voyages redeployed due to the conflicts in the Middle East and Red Sea. Full year Adjusted Net Cruise Cost Excluding Fuel per Capacity Day is expected to be approximately $159, increasing approximately 3.4% in Constant Currency, which includes an approximately 325 basis points impact of increased Dry-dock days and related costs in the year. Excluding this impact, Adjusted Net Cruise Cost Excluding Fuel per Capacity Day would be essentially flat year-over-year. Adjusted EBITDA is expected to grow 18% to approximately $2.2 billion during 2023 and Adjusted EPS is expected to grow 76% to approximately $1.23.

Liquidity and financial Position

The Company is committed to prioritizing efforts to optimize its balance sheet and reduce leverage. As of December 31, 2023, the Company had total debt of $14.1 billion and total Net Debt of $13.7 billion and continues to expect improvement in its Net Leverage. The Company repaid $1.9 billion of debt in 2023, which included the pay down in full of our $875 million Revolving Loan Facility.

At year-end, liquidity was $2.3 billion. This consists of approximately $402.4 million of cash and cash equivalents, $1.2 billion of availability under our Revolving Loan Facility and a $650 million undrawn backstop commitment. In March 2024 we expect to refinance our $650 million backstop commitment, replacing the secured commitment with an unsecured commitment. Additionally, as part of this refinancing, we expect to repay our $250 million 9.75% senior secured notes due 2028, our highest interest rate debt.

“Throughout the year, we successfully implemented measures to rightsize our cost base. Notably, the fourth quarter of 2023 marked our fourth consecutive quarter of improved Adjusted Net Cruise Costs Excluding Fuel per Capacity Day, this resulted in a substantial 21% reduction in 2023 compared to 2022,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd.

Kempa continued, “additionally, we made important advancements towards reducing leverage and de-risking our balance sheet during 2023. We repaid $1.9 billion of debt during the year, which included the pay down in full of our $875 million Revolving Loan Facility, and we remain confident that our strong liquidity position, ongoing cash generation and favorable growth prospects enable us to meaningfully reduce leverage over the course of 2024. We recently negotiated a refinancing of our $650 million backstop commitment and in connection with that, expect to repay our highest rate debt, the $250 million 9.75% senior secured notes due 2028. This transaction, which is expected to close in early March, will reduce interest expense and improve leverage while releasing the related secured collateral, another important step forward in improving our balance sheet.”

Full year 2023 results

GAAP net income was $166.2 million or EPS of $0.39 compared to net loss of $(2.3) billion or EPS of $(5.41) in the prior year. The Company reported Adjusted Net Income of $298.0 million or Adjusted EPS of $0.70 in the year. This compares to Adjusted Net Loss and Adjusted EPS of $(1.9) billion and $(4.64), respectively, in the prior year. Adjusted EBITDA was approximately $1.9 billion, in line with guidance driven primarily by solid revenue performance and lower Adjusted Net Cruise Cost Excluding Fuel.

Total revenue per Passenger Cruise Day increased approximately 17%, or approximately 18% on a Constant Currency basis compared to 2019. Gross margin per Capacity Day decreased approximately 11% on a reported, or approximately 10% on a Constant Currency basis, compared to 2019. Net Yield increased 4.6% on a Constant Currency basis compared to 2019.

Gross Cruise Cost per Capacity Day was $301, an approximately 6% decline from the prior year. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day was approximately $155 on a Constant Currency basis, an approximately 21% decline from the prior year.

Fourth quarter 2023 results

GAAP net loss was $(106.5) million or EPS of $(0.25) compared to net loss of $(482.5) million or EPS of $(1.14) in the prior year. The Company reported Adjusted Net Loss of $(77.1) million or Adjusted EPS of $(0.18) in the fourth quarter of 2023. This compares to Adjusted Net Loss and Adjusted EPS of $(439.7) million and $(1.04), respectively, in the fourth quarter of 2022. Adjusted EBITDA in the fourth quarter was approximately $359.6 million, in line with guidance driven primarily by solid revenue performance and lower Adjusted Net Cruise Cost Excluding Fuel.

Gross Cruise Costs per Capacity Day was approximately $280 in the quarter. Adjusted Net Cruise Costs excluding Fuel per Capacity Day was approximately $151, reflecting an approximately 19% decline from the fourth quarter of 2022, reflecting the benefits from the Company’s ongoing margin enhancement initiative.

The Company reported fuel expense of $187 million in the quarter. Fuel price per metric ton, net of hedges, decreased to $726 from $755 in 2022. Fuel consumption of 257,000 metric tons was in line with projections.

Interest expense, net was $197.4 million in 2023 compared to $177.1 million in 2022. The increase in interest expense is primarily the result of higher debt outstanding and higher interest rates.

Other income (expense), net was an expense of $(35.3) million in 2023 compared to an expense of $(24.0) million in 2022.

Outlook and guidance

In addition to announcing the results for the fourth quarter and full year 2023, the Company also provided guidance for the first quarter and full year 2024, along with accompanying sensitivities. The Company does not provide certain estimated future results on a GAAP basis because the Company is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of certain gains and charges. These items are uncertain and will depend on several factors, including industry conditions, and could be material to the Company’s results computed in accordance with GAAP. The Company has not provided reconciliations between the Company’s 2024 guidance and the most directly comparable GAAP measures because it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation without unreasonable effort.

Capital expenditures

Non-newbuild capital expenditures for the fourth quarter of 2023 were $102 million. Anticipated non-newbuild capital expenditures for full year 2024 are expected to be approximately $475 million including approximately $113 million in the first quarter.

Newbuild-related capital expenditures, net of export credit financing, are expected to be approximately $0.2 billion, $0.6 billion and $0.6 billion for the full years ending December 31, 2024, 2025 and 2026, respectively. Net newbuild-related capital expenditures for the fourth quarter of 2023 were $98 million including the delivery of Regent Seven Seas Grandeur in November and are expected to be approximately $40 million for the first quarter of 2024.

Viking files for Initial Public Offering (IPO)

Viking Holdings Ltd on Friday announced that it has confidentially submitted a draft registration statement on Form F-1 with the U.S. Securities and Exchange Commission (the SEC) relating to the proposed initial public offering of its ordinary shares. The number of ordinary shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to occur after the SEC completes its review process, subject to market and other conditions.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended. This announcement is being issued in accordance with Rule 135 under the Securities Act.