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Norwegian Cruise Line (NCLH) CFO Mark Kempa would not see the cruise operator taking any drastic motion to pay down the debt accrued in the course of the COVID-19 pandemic.
“As we glance ahead over the course of the subsequent two to 3 years, we now have a couple of billion {dollars} a 12 months [of debt] plus or minus that is coming due,” Kempa mentioned on Yahoo Finance Stay (video above). “And we firmly imagine, given our trajectory at the moment, that with our current money available and our anticipated natural money move, we’re going to have the ability to repay our debt within the regular course of enterprise by simply good old school earnings and money era.”
In line with SEC filings, the corporate ended the second quarter with about $12.2 billion in long-term debt.
“Our board has no urge for food to problem any form of fairness to pay down debt or to delever,” Kempa added. “This firm is a money engine machine.”
Norwegian Cruise Line inventory fluctuated in early buying and selling on Thursday earlier than transferring greater than 2% increased as of two:00 p.m. ET.
Kempa’s confidence in paying down debt comes at a precarious time for the cruise line trade.
Ticket discounting has picked up lately because the U.S. financial system slows and issues round COVID-19 linger. Regardless of this, Norwegian Cruise Line ended all COVID-19 masking, testing, and vaccination necessities on Tuesday.
“We instantly noticed a major increase in our bookings because of that,” Kempa informed Yahoo Finance from Norwegian’s latest ship, the Prima.
In the meantime, Norwegian rival Carnival Cruise Line (CCL) badly missed analyst quarterly gross sales and revenue expectations final week. The corporate additionally warned that bookings can be weaker than anticipated, which hammered the inventory worth.
Nonetheless, Kempa maintained that Norwegian continues to see robust demand.
“Our demand continues to be very, very robust, even towards the backdrop of a variety of completely different world occasions, financial occasions,” Kempa mentioned. “Our buyer tends to be a higher-level buyer than that of our friends. So whereas not insulated from any form of recessionary points or financial malaise, our clients are typically extra insulated and extra resilient from that.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Comply with Sozzi on Twitter @BrianSozzi and on LinkedIn.
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