NCL Q2 Bunker Costs Decrease 15.9%

NCL says its 2016 Q2 bunker costs decreased compared to the same period of 2015.

Norwegian Cruise Line Holdings Ltd. (NCL) [NASDAQ:NCLH], in the release of its 2Q 2016 results, says the price it paid for bunkers net of hedges decreased 15.9 percent year on year during the period, falling to $469 from $558 in 2015.

Overall, NCL reported a bunker cost for the period of $80.6 million, and noted that market volatility lead to a loss of $3.2 million from the "ineffective portion" of its bunker hedging portfolio.

NCL reports that it generated a GAAP net income of $145.2 million during 2016's Q2, compared to $158.5 million during the same period of 2015, from $1.2 billion in revenue during the period, a 9.3 percent year on year increase.

"As we enter the second half of the year, we are revising our earnings expectations primarily as a result of four factors: continued weak demand from our core North American consumer for European sailings at a time when half of our fleet is deployed in the region, including eight of our highest yielding ships; the effect of a weaker British pound post the Brexit vote; an adjustment to earlier pricing expectations for Miami-based Caribbean itineraries, which continue to outperform prior year despite a doubling of capacity in the low season months; and the impact from maintaining pricing discipline to minimize discounting," said Frank Del Rio, president and CEO of NCL.

"With this revision to expectations, we are confident we will deliver strong earnings growth for full year 2016 and grow 2017 Adjusted EPS in the range of 15 percent to 25 percent."

In May, Oy Langh Tech Ab (Langh Tech) announced that its hybrid scrubber systems would be featured on two NCL newbuildings of the Breakaway Plus class, which are under construction at Meyer Werft GmbH (Meyer Werft) in Papenburg, Germany.