Norwegian Cruise Line in the red after Prestige takeover

Norwegian Cruise Line in the red after Prestige takeover

Norwegian Cruise Line Holdings dropped into the red in the first quarter of the year due to costs associated with the takeover of luxury Prestige Cruise Holdings.

The parent company of Norwegian Cruise Line and the recently acquired Oceania Cruises and Regent Seven Seas Cruises reported a loss of $21.5 million for the three months to March 31.

Adjusted net income came in at $62.6 million as revenue jumped to more than $938 million from $664 million for the same period last year.

The company revealed higher projected ‘synergy’ savings of $75 million this year and $115 million in 2016.

Norwegian previously said it expected $40 million in synergies this year following the acquisition of Prestige but said it had identified $75 million - comprised of $30 million in revenue and $45 million in cost.

The company is earmarking $20 million for reinvestment directed to business initiatives to further drive demand to the three brands.

President and chief executive, Frank Del Rio, said: “I am pleased to report strong earnings out of the gate for our first full quarter of operations following the combination of Norwegian and Prestige late last year.

“These results are even more impressive as they come against strong comparables in the prior year, particularly for the Norwegian brand, and headwinds from foreign currency exchange rates.”

He added: “The identification of additional synergies has come as the result of a truly collaborative effort between our dedicated integration team and all areas of the organisation.

“Tasked with a mandate that synergies have a neutral or positive impact on the guest experience, the organisation has come together to identify meaningful incremental synergies.

“The net synergies will have an immediate impact on the bottom line in 2015, while amounts reinvested in our business initiatives will benefit our strategies for earnings growth in 2016 and beyond.”

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