Norwegian Cruise Line Places Largest Order Of 8 New Ships In Historic Move To Meet Growing Demand

Norwegian Cruise Ship — Image Credits: Norwegian Cruise Line/Facebook

Norwegian Cruise Line Holdings has reportedly placed its most significant vessel order in the firm’s history to meet the increasing demand for cruise travel, according to a report by the cruise operator on Monday.

The firm will be ordering eight new vessels across three brands, scheduled for delivery from 2026 to 2036, and executives have notified Reuters without providing a price for the vessels. Norwegian Cruise Line announced the closing of stock trading.

Its shares closed at $19.39, up from 2.65%. Norwegian CEO Harry Sommer informed Reuters that the cruise industry embodies 1.5% to 2% of the all-around vacation market, so there is enough room for growth.

Sommer added that this is the most extensive look at the future that the firm has ever done.

It demonstrates the firm’s optimism regarding the future of the industry. Sommer mentioned that these new ship orders will not increase capital expenditure provisions or the firm’s net leverage.

Due to inflation, the cruise operator declared that the new vessels were relatively more expensive than the previous ones.

According to an SEC filing, the company took about $1.5 billion in euro-denominated term loans to partly finance the purchase of four new vessels.

Norwegian mentioned that the new vessels will enable the firm to grow its passenger capacity by 6% yearly through 2028 and 4% annually through 2036.

Sommer also said the firm could develop and deliver these outsized returns on dividend-free cash flow while not impacting leverage in the near future.

By the end of last year, the company had a total net debt of $13.7 billion. Italian shipmaker Fincantieri said it would build four ships and signed a letter of intent to construct the remaining four.

Furthermore, Norway plans to invest about $150 million in the construction of a pier on a private island in the Bahamas, which is set to be finished by late 2025.

The firm declared that the pier will permit it to carry about 50% more guests to the region yearly.

Reference: Yahoo

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