$挪威郵輪(NCLH.US)$ Once cruises were shut down globally, revenues fell off a cliff. NCLH was able to reach $1.28B in fiscal 2020 due to a strong Q1, however this is an 80% decline from 2019. For the 12 months ending June 30, 2021 the company only made $23 million in top-line revenue. For fiscal 2020 the company lost more than $4B. The company as been losing over $600M each quarter in 2021. This has led to the need to devalue shareholders.
In order to continue operating, the company needed to use both debt and equity financing. At December 31, 2021 NCLH had a $6.8B long-term debt load. Not great considering the $252M cash balance and $730M in total current assets, however not an imminent danger. Fast forward to June 30, 2021 and the debt load now stands above $12B – an 80% increase. Considering that the company made $930M in net income in 2019, this is very concerning.
Further, shares have also been devalued by massive dilution. Diluted average shares outstanding have gone from 214M at December 31, 2019 to over 369M at June 30, 2021. This is a 72% increase in diluted shares over 18 months of time. Worse, the company will not be able to conduct buybacks, with the massive debt load needing to be serviced. It could be well over a decade before this would even be considered.
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