Rare BermudaBound2014 Posted May 9, 2022 #901 Share Posted May 9, 2022 Hi Oteixera, I've been posting a bit in the RCL stock thread, but I feel like I'm cheating on you so I wanted to point you to that discussion too lol. It's very interesting and I think you would like some of the chatter. Another brutal day in the market. NCL releases tomorrow before the bell and I'm saying this upfront~ I call BS. lol Anyway, Here is a prediction if intersted: https://finance.yahoo.com/news/factors-setting-tone-norwegian-cruise-153203098.html I left Maui last week for the glorious Michigan Summer. I've rented the same villa again for next winter, but these stocks need to turn around for me to justify that amount of 'play' money. Right now, my shorts are helping ease the pain, but this is getting down right nasty. I Just got back from the grocery store. I do not believe inflation is only 8.5%.. MANY of my standard goods are up much more than that. Some more than double since I left here at the beginning of January. Gas is exactly double what I paid last January. The cruise lines just keep taking punch after punch after punch. I agree with @at_sea in that there will always be cruising, but I just don't see how any of the lines can come out of this without a serious correction. It's a bloodbath. 1 Link to comment Share on other sites More sharing options...
Crazy planning mom Posted May 9, 2022 #902 Share Posted May 9, 2022 36 minutes ago, BermudaBound2014 said: Hi Oteixera, I've been posting a bit in the RCL stock thread, but I feel like I'm cheating on you so I wanted to point you to that discussion too lol. It's very interesting and I think you would like some of the chatter. Another brutal day in the market. NCL releases tomorrow before the bell and I'm saying this upfront~ I call BS. lol Anyway, Here is a prediction if intersted: https://finance.yahoo.com/news/factors-setting-tone-norwegian-cruise-153203098.html I left Maui last week for the glorious Michigan Summer. I've rented the same villa again for next winter, but these stocks need to turn around for me to justify that amount of 'play' money. Right now, my shorts are helping ease the pain, but this is getting down right nasty. I Just got back from the grocery store. I do not believe inflation is only 8.5%.. MANY of my standard goods are up much more than that. Some more than double since I left here at the beginning of January. Gas is exactly double what I paid last January. The cruise lines just keep taking punch after punch after punch. I agree with @at_sea in that there will always be cruising, but I just don't see how any of the lines can come out of this without a serious correction. It's a bloodbath. From what I have been reading many Royal Caribbean sailings since March have been sailing at 100 percent or more. If that's the case and continues , why wouldn't Royal survive? Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 9, 2022 #903 Share Posted May 9, 2022 (edited) 33 minutes ago, Crazy planning mom said: From what I have been reading many Royal Caribbean sailings since March have been sailing at 100 percent or more. If that's the case and continues , why wouldn't Royal survive? According to the latest from the new CEO of RCL ships are still only averaging 75-80% (and that is with the spring break and easter bump). And we all know that I believe if the CEO is saying 75-80% I'm betting it's closer to 65-70%. I do believe there were a few sold out/high capacity sailings, but again, a holiday bump. Sailings were well over 100% pre-covid during spring break/easter. And notice they need 90% before they can even begin to generate any profit, which is why cruise lines continue to go farther and farther into debt even though they are sailing. For what little it's worth, my opinion is that RCL is the best poised moving forward, but I expect they will need to dilute reasonably soon also. It's bleak. "We are starting to get passenger load factors of 75-80%, at which point you start to generate a lot of cash. When you get to about a 90% load factor, you start to generate profit. Historically, that line of profitability can be lower, roughly 80%. But we have a lot more debt now. Prior to the pandemic, our annual interest expense was about $300 million or $400 million. Now it’s about $1.1 billion or $1.2 billion. We will burn that off in the coming years. And then this business quickly returns back to the pre-Covid profitability levels". https://www.barrons.com/articles/royal-caribbean-cruise-ceo-outlook-51651863557?siteid=yhoof2 PS: The devil is in the details. I want to them to quantify 'coming years' lol. Here's what the charts look like. The marked is terrible right now, but cruise lines have done significantly worse than the market over the last two weeks. The market is down roughly 10% while cruise lines are down over 25%. Confidence in the industry is waning. Edited May 9, 2022 by BermudaBound2014 Link to comment Share on other sites More sharing options...
oteixeira Posted May 10, 2022 #904 Share Posted May 10, 2022 2 hours ago, BermudaBound2014 said: Hi Oteixera, I've been posting a bit in the RCL stock thread, but I feel like I'm cheating on you so I wanted to point you to that discussion too lol. It's very interesting and I think you would like some of the chatter. Another brutal day in the market. NCL releases tomorrow before the bell and I'm saying this upfront~ I call BS. lol Anyway, Here is a prediction if intersted: https://finance.yahoo.com/news/factors-setting-tone-norwegian-cruise-153203098.html I left Maui last week for the glorious Michigan Summer. I've rented the same villa again for next winter, but these stocks need to turn around for me to justify that amount of 'play' money. Right now, my shorts are helping ease the pain, but this is getting down right nasty. I Just got back from the grocery store. I do not believe inflation is only 8.5%.. MANY of my standard goods are up much more than that. Some more than double since I left here at the beginning of January. Gas is exactly double what I paid last January. The cruise lines just keep taking punch after punch after punch. I agree with @at_sea in that there will always be cruising, but I just don't see how any of the lines can come out of this without a serious correction. It's a bloodbath. Can you call BS BEFORE the actual release? You are killing me here. I would go check out the other thread but I can only take so much, I have to make sure I don't end up with bad blood pressure. :) I so feel you on the play money, it seems nothing is safe in the market right now (Even oil took a nose dive today). Best of luck to your positions, I hope there is a lot more Maui in your future. 2 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #905 Share Posted May 10, 2022 (edited) 19 minutes ago, oteixeira said: Can you call BS BEFORE the actual release? You are killing me here. I'm so cynical because Frank is the best salesman in the lot. :). And we can not have you getting High blood pressure. This will turn around. We are both up from the covid knock down so we need to keep that perspective. But, it is hard to watch some days so you have my empathy. And I hope you know that I want nothing but the best for your portfolio. I didn't load up on shorts for tomorrow. The stock is already just under $16. I don't trust it moving a lot either way. This will be the second release I haven't added shorts. It's just soooo squirrely. Edited May 10, 2022 by BermudaBound2014 1 Link to comment Share on other sites More sharing options...
Rare At Sea At Peace Posted May 10, 2022 #906 Share Posted May 10, 2022 The % drop today was very magnified to a multiple to indices. Something got out? RE NCL release tomorrow? I guess we wait to read in the morning. The past year+ has been 'well we've lost billions and billions this quarter but future bookings look great (farther and farther out). Well, they probably didn't lose as much so will the focus be "we returned to much less losses" and not mention what are the future bookings after the summer (the summer should be positive)? If the focus is "our current performance is not as bad" as the rally cry with not much 'ado' about bookings Fall, Winter and Spring, well, "all our ships are back" I guess is the next line of BS to throw and see if it sticks. Their liquidity is almost 100% funded by advance customer deposits. 😕 2 Link to comment Share on other sites More sharing options...
Rare At Sea At Peace Posted May 10, 2022 #907 Share Posted May 10, 2022 (edited) Well, the earning release for the quarter is out. https://d1io3yog0oux5.cloudfront.net/_06ab1889647c9b133dc676cd72f5ab60/nclhltd/news/2022-05-10_Norwegian_Cruise_Line_Holdings_Reports_First_488.pdf Earnings slide show. https://d1io3yog0oux5.cloudfront.net/_06ab1889647c9b133dc676cd72f5ab60/nclhltd/db/1111/11249/file/NCLH+Q1+2022+Earnings+Call+Presentation_Final_ForDistribution.pdf Edited May 10, 2022 by At Sea At Peace 2 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #908 Share Posted May 10, 2022 As always, thanks @At_Sea ... it looks bad on the surface but I haven't dug in to find out if it's better or worse than I expected. The conference call is at 10 a.m. EST and that is always interesting. I'm going to try to listen in for a bit. I believe both CCL and RCL gave a financial outlook for second quarter. I did a little head tilt with this statement: The company said it could not provide a financial outlook given uncertainty surrounding COVID-19 and the Ukraine war, but it does expect a net loss for the second quarter. The stock has dropped 23.1% year to date through Monday, while the S&P 500 SPX, 1.03% has shed 16.3%. https://www.marketwatch.com/story/norwegian-cruise-stock-gains-despite-wider-than-expected-loss-revenue-miss-2022-05-10?siteid=yhoof2 1 Link to comment Share on other sites More sharing options...
oteixeira Posted May 10, 2022 #909 Share Posted May 10, 2022 Thanks @BermudaBound2014 and @At Sea At Peace. I had a routine physical this morning, good news, BP is fine! LOL Kind of glad I missed the open, reading this would have stressed me out. I knew they would miss based on shutting down during OMICRON, a move no other line did. Everything else is the same story (good bookings going forward, profitable by EOY, etc). So, basically what we all knew they would say. Kind of surprised they are up, but after yesterday, some folks are probably seeing that this is a good buy opportunity on many many stocks and sectors. I am still holding my cash. To avoid the falling knife I try to wait for 2-3 reversal days in a row of flat or up, and then I decide if I feel like it is a good time to get in at that level. Today is a very small start to that if we stay up all day (and I am not looking at travel to be honest). Do we have a stock market room/thread for general talk on here? That could be fun as well. 1 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #910 Share Posted May 10, 2022 1 minute ago, oteixeira said: Thanks @BermudaBound2014 and @At Sea At Peace. I had a routine physical this morning, good news, BP is fine! LOL Kind of glad I missed the open, reading this would have stressed me out. I knew they would miss based on shutting down during OMICRON, a move no other line did. Everything else is the same story (good bookings going forward, profitable by EOY, etc). So, basically what we all knew they would say. Kind of surprised they are up, but after yesterday, some folks are probably seeing that this is a good buy opportunity on many many stocks and sectors. I am still holding my cash. To avoid the falling knife I try to wait for 2-3 reversal days in a row of flat or up, and then I decide if I feel like it is a good time to get in at that level. Today is a very small start to that if we stay up all day (and I am not looking at travel to be honest). Do we have a stock market room/thread for general talk on here? That could be fun as well. Morning! Glad your BP is fine 🙂 🙂 🙂 Big gains at opening bell!! Side note, I do believe you are incorrect when you say "in a move no other line did' regarding Omicron. All of the cruise lines shut down cruise ships for Omicron. NCL did shutter the most, but that is likely because they are so small comparatively. CCL and RCL had extra ships in the caribbean and they used these ships to rotate crew. In other words, they could staff ships with negative covid crew after they spent 5 days on one of the isolation ships. But I do agree that they shut down more ships, but that's because they had fewer options. I started this thread in the floataway lounge which allows for other discussions. We can see if it gets any legs. 1 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #911 Share Posted May 10, 2022 Here's a link to the conference call if interested: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Iw0nOsxA Link to comment Share on other sites More sharing options...
oteixeira Posted May 10, 2022 #912 Share Posted May 10, 2022 11 minutes ago, BermudaBound2014 said: Here's a link to the conference call if interested: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Iw0nOsxA One thing I saw pretty quickly, the two current ships being built at around 3300 PAX, the last 4 in the line will all be bigger, holding over 3500 PAX. Not so important to the bottom line numbers, but still an interesting tidbit to pull away from the call that got little fanfare. 1 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #913 Share Posted May 10, 2022 15 hours ago, Crazy planning mom said: From what I have been reading many Royal Caribbean sailings since March have been sailing at 100 percent or more. If that's the case and continues , why wouldn't Royal survive? 15 hours ago, BermudaBound2014 said: According to the latest from the new CEO of RCL ships are still only averaging 75-80% (and that is with the spring break and easter bump). And we all know that I believe if the CEO is saying 75-80% I'm betting it's closer to 65-70%......... This is funny. Yesterday I said that I didn't believe RCL was already averaging 75-80% occupancy and that I was betting occupancy is closer to 65-70%. Based on today's press release looks like the actual number is 68%. They are hoping that next quarter will average 75-80%. We just can't trust what is in print anymore (not just cruise stock). "Load factors improved throughout the first quarter, and we finished the month of March at a load factor of 68%," the CEO said. "We expect our load factors to continue to build, averaging between 75% and 80% in the second quarter, and reaching triple digits by the end of the year." https://www.thestreet.com/investing/how-crowded-will-my-cruise-be-royal-caribbean-answers?puc=yahoo&cm_ven=YAHOO 1 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #914 Share Posted May 10, 2022 Anyone listening to the press conference? The spins are terrific! I'll wait for the transcript to be released so I can cut and print the quotes from Frank and company. Link to comment Share on other sites More sharing options...
Rare At Sea At Peace Posted May 10, 2022 #915 Share Posted May 10, 2022 2 hours ago, BermudaBound2014 said: This is funny. Yesterday I said that I didn't believe RCL was already averaging 75-80% occupancy and that I was betting occupancy is closer to 65-70%. Based on today's press release looks like the actual number is 68%. They are hoping that next quarter will average 75-80%. We just can't trust what is in print anymore (not just cruise stock). "Load factors improved throughout the first quarter, and we finished the month of March at a load factor of 68%," the CEO said. "We expect our load factors to continue to build, averaging between 75% and 80% in the second quarter, and reaching triple digits by the end of the year." https://www.thestreet.com/investing/how-crowded-will-my-cruise-be-royal-caribbean-answers?puc=yahoo&cm_ven=YAHOO Well, some tidbits. "By the end of the first quarter of 2022 the Company had 85% of its capacity operating. Occupancy in the first quarter of 2022 was 48% primarily reflecting the impact of Omicron which caused operational challenges and disruptions, including additional travel restrictions, increased health-related protocols and certain port closures." Am I reading the 48% right? Is that the 'load factor' for the quarter and March (per thestreet) was up to 68%? "The Company’s advance ticket sales balance, including the long-term portion, increased $418 million in the quarter to $2.2 billion as of March 31, 2022." "As of March 31, 2022, the Company’s total debt position was $13.6 billion and the Company’s liquidity was $3.1 billion, consisting of cash and cash equivalents and a $1 billion commitment available through August 15, 2022." Note, $3.1B of liquidity, less $1B LOC availability, is $2.1B of actual liquidity. Of note, below, in tandem the 'advance ticket sales balance' at March 31, 2022 was $2.2B; i.e., bookings, bookings, bookings are essentially free lines of credit life-lines still. Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 10, 2022 #916 Share Posted May 10, 2022 (edited) @At Sea At Peace It looks to me like NCL load factors are significantly less than RCL. Note: Thestreet article I quoted of 68% was for rCL (in response to crazy planning mom question). Please do come join us in the floataway lounge you are better at explaining most things than I am :). And by 'most' I mean all 🙂 Edited May 10, 2022 by BermudaBound2014 Link to comment Share on other sites More sharing options...
Rare At Sea At Peace Posted May 11, 2022 #917 Share Posted May 11, 2022 18 hours ago, BermudaBound2014 said: It looks to me like NCL load factors are significantly less than RCL. Well, I guess I read it correctly and Frank DR is stating that NCL isn't going to reduce pricing just to fill the ships; calling for an estimated 65% in the 2nd Quarter load capacity / occupancy. https://www.cruiseindustrynews.com/cruise-news/27460-norwegian-won-t-sacrifice-cruise-pricing-for-full-ships-65-expected-in-q2.html Norwegian Won’t Sacrifice Cruise Pricing for Full Ships; 65% Expected in Q2 Frank Del Rio Earning Call ~ "We have stood firm on our go-to-market strategy of marketing to fill and maintaining price integrity by emphasizing value over price” “You have heard me say time and time again that we will not sacrifice our industry-leading pricing to temporarily bolster our load factors and I continue to stand behind that philosophy." "Our go-to-market strategy of marketing to fill, versus discounting to fill and emphasizing value over price is paying off in droves, with pricing meaningfully higher for all future periods when compared to the comparable pre-pandemic periods." Del Rio said he expected occupancy to be in the 65 percent range in the second quarter. 1 Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 11, 2022 #918 Share Posted May 11, 2022 Morning @At Sea At Peace, This is interesting because NCL is deeply discounting last minute cruises. How the heck can withstand another quarter at 65%? The numbers just don't add up for me. We started a thread in the floataway lounge where we can discuss all cruise line stock (and others) in one place. I'd like to, once again, personally invite you to join us there (pretty please lol). No pressure, but I always appreciate your input. I have some thoughts on MSC/NCL. Link to comment Share on other sites More sharing options...
Karaboudjan Posted May 11, 2022 #919 Share Posted May 11, 2022 2 hours ago, BermudaBound2014 said: Morning @At Sea At Peace, This is interesting because NCL is deeply discounting last minute cruises. How the heck can withstand another quarter at 65%? The numbers just don't add up for me. They say they reached positive operating cash flow in March and expect to maintain that in Q2. That's certainly not the end of the road back, but it seems like they can at least endure that for another quarter. As for last minute pricing, what is really left for costs to cover at that point? Even a deep discount probably covers the food and drinks. Also, it seems like onboard spend is big, especially now, and that spend is not discounted. In fact, I would bet that many people who get good deals are inclined to spend more onboard. Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 11, 2022 #920 Share Posted May 11, 2022 1 hour ago, Karaboudjan said: They say they reached positive operating cash flow in March and expect to maintain that in Q2. That's certainly not the end of the road back, but it seems like they can at least endure that for another quarter. As for last minute pricing, what is really left for costs to cover at that point? Even a deep discount probably covers the food and drinks. Also, it seems like onboard spend is big, especially now, and that spend is not discounted. In fact, I would bet that many people who get good deals are inclined to spend more onboard. You and I both know that positive cash flow is no where near the same as profitability and dipping their toes in positive cash flow still means sinking 1 billion dollars a quarter into more debt. That's billion with a B. Each quarter not annually. Interesting note about occupancy: RCL said they need their ships to sail at 90% occupancy to begin to reach profitability (they could reach profitability at 80% pre-covid). RCL said they expect to be sailing 75-80% next quarter while NCL lags behind at 65%!!! But, I do agree that they likely aren't going anywhere Q2 so I really should have worded that differently. Something along the lines of..... "How much longer can they withstand 65% occupancy?" My last minute pricing comment was in regard to this statement: "We have stood firm on our go-to-market strategy of marketing to fill and maintaining price integrity by emphasizing value over price” because they really aren't standing firm and maintaining price integrity after final payment lol. How is that go-to-marketing strategy working if they only expect 65% occupancy? BTW: Did you listen to the conference call? I thought Franks Del Rio's explanation of how they spin the 'record breaking sales' pitch very interesting. NCL stock is down nearly 50% since resuming cruising. I surmise that none of the big 3 can ever reach 90% occupancy on a consistent basis until vaccine, testing, and quarantining are removed. I still don't see the silver lining. Link to comment Share on other sites More sharing options...
fstuff1 Posted May 11, 2022 #921 Share Posted May 11, 2022 Norwegian Won’t Sacrifice Cruise Pricing for Full Ships?! Are you kidding me?! He said that with a straight face? Tons of Last minute pricing out there. Surprised noone called him out on that during the meeting. Link to comment Share on other sites More sharing options...
Karaboudjan Posted May 11, 2022 #922 Share Posted May 11, 2022 4 hours ago, BermudaBound2014 said: My last minute pricing comment was in regard to this statement: "We have stood firm on our go-to-market strategy of marketing to fill and maintaining price integrity by emphasizing value over price” because they really aren't standing firm and maintaining price integrity after final payment lol. How is that go-to-marketing strategy working if they only expect 65% occupancy? 2 hours ago, fstuff1 said: Norwegian Won’t Sacrifice Cruise Pricing for Full Ships?! Are you kidding me?! He said that with a straight face? Tons of Last minute pricing out there. Surprised noone called him out on that during the meeting. What exactly does 'maintain price integrity' mean? Is he really referring to last minute pricing? Did NCL not reduce prices at the last minute pre-COVID? Or is he saying that they won't lower prices across the board for the sake of increasing occupancy? I have not listened to the call so I don't know if there is context that makes it clear what he means. 1 Link to comment Share on other sites More sharing options...
Beezo Posted May 12, 2022 #923 Share Posted May 12, 2022 Interesting commentary on Q2. Mind you, only 7 1/2 weeks left in Q2 so they have a decent view of how the past 6ish weeks have done. Link to comment Share on other sites More sharing options...
Beezo Posted May 12, 2022 #924 Share Posted May 12, 2022 Second thought - when he says "Norwegian won't sacrifice pricing" comments - I'm thinking he's referencing NCL Holding Company, inclusive of Oceania and Regent. Those brands have longer booking curves as well so wanting to stay the course on the current GTM. Link to comment Share on other sites More sharing options...
Rare BermudaBound2014 Posted May 12, 2022 #925 Share Posted May 12, 2022 11 minutes ago, Beezo said: Second thought - when he says "Norwegian won't sacrifice pricing" comments - I'm thinking he's referencing NCL Holding Company, inclusive of Oceania and Regent. Those brands have longer booking curves as well so wanting to stay the course on the current GTM. That is incorrect. Del Rio is speaking of all three; NCL, Oceania, and Regent. Marketing to fill has been NCL's marketing strategy for quite some time. He is very specific about this in the conference call (linked below). 16 hours ago, Karaboudjan said: What exactly does 'maintain price integrity' mean? Is he really referring to last minute pricing? Did NCL not reduce prices at the last minute pre-COVID? Or is he saying that they won't lower prices across the board for the sake of increasing occupancy? I have not listened to the call so I don't know if there is context that makes it clear what he means. There are basically two pricing strategies used. "Price to Fill" (discounting) and "Marketing to fill" which is maintaining pricing integrity thru targeted marketing (not discounting). Del Rio keeps stating that NCL is using "Price to Fill' and will not lower prices for the sake of increasing occupancy. What we do know is that this isn't entirely true since there are excellent last minute prices to be had. I do agree that "Marketing to fill" seems to be the strategy until final payment, but then there is a quick flip to "Price to fill" (ie, discounting to increase occupancy). Since so many people have FCC's, cruise next, and next cruise certs to burn, I can understand why NCL would want prices to remain high. To some degree, the cruise lines have a captive audience in this regard. But what we also know is that NCL's strategy did not work Q1 in terms of getting passengers onboard since RCL load factors were significantly higher. In Q1 RCL load was 68%. NCL load was 54%. In Q2 RCL expects 75-80% while NCL only expects 65%. From Del Rio: “We have stood firm on our go-to-market strategy of marketing to fill and maintaining price integrity by emphasizing value over price,” said Frank Del Rio, president and CEO, on the company’s first quarter earnings call. “You have heard me say time and time again that we will not sacrifice our industry-leading pricing to temporarily bolster our load factors and I continue to stand behind that philosophy. "Our go-to-market strategy of marketing to fill, versus discounting to fill and emphasizing value over price is paying off in droves, with pricing meaningfully higher for all future periods when compared to the comparable pre-pandemic periods." Here is the transcript from the earnings call if interested: https://seekingalpha.com/article/4509672-norwegian-cruise-line-holdings-ltd-nclh-ceo-frank-del-rio-on-q1-2022-results-earnings-call Link to comment Share on other sites More sharing options...
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