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Liquidity, latest on how long NCL can last...


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People are always arguing about how long we can go before we HAVE to have cruising for our favorite company to survive.  I was reading a piece this morning from yahoo finance today that had an analyst that lowered projected price points on all 3 major stocks but had this to say about the latest cash raised and how long NCL can go.  Seems to me this is pretty good news for anyone holding stock, since I think most can agree we should have some sailing by the end of next year.  BTW, Carnival was estimated as good until July, even with all the ships sold.

 

Norwegian plans to use the $1.4 billion in proceeds from the debt and equity offering it announced last week to pay down its $675-million revolver, Didora said.  With beefed-up liquidity of $3 billion, a cash burn rate of $120 million to $160 million per month and an estimated $35 million per month in cash refunds, the analyst said he expects Norwegian's liquidity to last through November 2021.  This estimate assumes continued suspension of cruises and no improvement in cash refunds.

 

Edited by oteixeira
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People are always arguing about how long we can go before we HAVE to have cruising for our favorite company to survive.  I was reading a piece this morning from yahoo finance today that had an analyst that lowered projected price points on all 3 major stocks but had this to say about the latest cash raised and how long NCL can go.  Seems to me this is pretty good news for anyone holding stock, since I think most can agree we should have some sailing by the end of next year.  BTW, Carnival was estimated as good until July, even with all the ships sold.
 

Norwegian plans to use the $1.4 billion in proceeds from the debt and equity offering it announced last week to pay down its $675-million revolver, Didora said.

With beefed-up liquidity of $3 billion, a cash burn rate of $120 million to $160 million per month and an estimated $35 million per month in cash refunds, the analyst said he expects Norwegian's liquidity to last through November 2021.

This estimate assumes continued suspension of cruises and no improvement in cash refunds. 

 

Interesting, I have read that all 3 big lines can last nearly until 2022. Let's pray to the Lord we don't need that long. I love all 3 big lines, we need all three to be in business competing against each other. Plus we all have our favorite line, I would not want to see one disappear.

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Words like "Can last until nearly 2022" and cash to last until "November 2021" are still scary. Especially for those of us who think cruising may not restart until next year.

 

First, The cash on hand could weaken if the rate of cancellations with refunds increases and bookings get soft.  Come spring, the analysis could easily be clarifying into running out of cash by September or so.

 

Second, We'll see "going concern" on the SEC filings again. That could weaken investment.

 

Third, we need a restart well before the time they could run out of cash, and it needs to be strong. Not with seriously discounted cruises and lower yields per sailing or half the ships sailing. They must be profitable before they run out of cash - generating cash again.  Income has be be above their debt service + operating costs.

Edited by PelicanBill
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3 minutes ago, PelicanBill said:

 

 

 

 

Third, we need a restart well before the time they could run out of cash, and it needs to be strong. Not with seriously discounted cruises and lower yields per sailing or half the ships sailing. They must be profitable before they run out of cash - generating cash again.  Income has be be above their debt service + operating costs.

Even if that is not true, income coming in would offset the cash going out and be the catalyst for future income. 

As this draws on and cruises get cancelled again, people are going to opt for a refund but once sailings start then bookings will/should increase and the result will be cash coming in.

 In the early stages, is it not better to sail and lose 100 million a month versus not sailing and losing 150 million a month? Break even would be even better.

Steve

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If demand doesn't return, the cruise lines are toast.

 

And that is the challenge. I was listening to the CEO of Delta this AM and his comment was very clear....we need demand for travel, which we don't currently have.

 

I was also reading about a large Ohio amusement park, Cedar Point. They had implemented an advance reservation system, whereby you needed a reservation to visit. It was their way to control overcrowding. Well, that was also abandoned as they never got close to filling up all their reservation slots since there was not enough demand from consumers.

 

So, once cruising does reopen, they'll need to have demand for the product, a product that will be vastly different from what we've become accustomed to. Probably not an environment where we'd want to spend our vacation days.

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Interesting.  Disneyworld is also experiencing softer demand that expected. Closed many hotels and left the expensive DVC (timeshare)  rooms available, and the DVC members are not traveling, and people aren't booking them for cash either.  Park attendance has been observed as well below the daily reservation limit in all parks except Hollywood Studios which has the new Star Wars stuff.

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1 hour ago, PelicanBill said:

Second, We'll see "going concern" on the SEC filings again.

This would be GOOD.   It's when those words are preceded by "substantial doubt" that it becomes worrisome.

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I am sure there will be cruising in 2021. Even if it is not in the US it will be in Europe. And i am sure that there is enough demand just from us europeans to fill one or another ship of NCL. They might not be sailing with 10 ships in Europe, but 2 or three should be possible to fill,even if US citizens are still not allowed to enter the EU.

this means that they will have some income and so can survive even longer.

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5 hours ago, PelicanBill said:

 They must be profitable before they run out of cash - generating cash again.  Income has be be above their debt service + operating costs.

Many start up businesses are not profitable until later years and yet they can still operate and survive. Tesla is a very good example of that. As soon as a vaccine is found, cruise lines will be back in business and generating cash flow again the very next day.

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18 minutes ago, JustAPilot said:

More like when a safe vaccine for all ages is available will demand come back. Who do you think the majority of cruisers are during the off season? Take a guess, it's not your healthy under 60 years old crowd.. 

Exactly. On that front, NCL and Carnival's shorter cruises position them better than Princess and Holland America.

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21 hours ago, sfaaa said:

As soon as a vaccine is found, cruise lines will be back in business and generating cash flow again the very next day.

And what are the long term side effects.....if any from a rushed to market vaccine?

 I doubt the seniors will rush to take it.

What are the effects when taken with other meds?

Too many unknowns in the early stages.

Steve

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23 hours ago, sfaaa said:

Many start up businesses are not profitable until later years and yet they can still operate and survive. Tesla is a very good example of that. As soon as a vaccine is found, cruise lines will be back in business and generating cash flow again the very next day.

With their debt load level, they will not only need to be back in business, but will need to be generating a substantial percentage of their pre-COVID cash flow just to pay their debt load.

Edited by npcl
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2 hours ago, mscdivina2016 said:

And what are the long term side effects.....if any from a rushed to market vaccine?

 I doubt the seniors will rush to take it.

What are the effects when taken with other meds?

Too many unknowns in the early stages.

Steve


Steve,

 

   Just to run this thread out, you think people will be more afraid of the vaccine than the disease?   I think there are plenty of people that will line up for the vaccine, me included, as I have a handicapped son who is in the high risk category and I want him to be safe.

 

Orlando

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Steve,
 
   Just to run this thread out, you think people will be more afraid of the vaccine than the disease?   I think there are plenty of people that will line up for the vaccine, me included, as I have a handicapped son who is in the high risk category and I want him to be safe.
 
Orlando
Count me in that lineup to get the vaccine. I'll trake my regular flu shot and then this shot. No biggie at all. Everyone else who is on the conspiracy train can walk around not protected.

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10 minutes ago, JAMESCC said:

Count me in that lineup to get the vaccine. I'll trake my regular flu shot and then this shot. No biggie at all. Everyone else who is on the conspiracy train can walk around not protected.

Sent from my Pixel 4 XL using Tapatalk
 

I do wonder if that is part of it.  My whole family gets the flu shot every year, no big deal at all.

 

Orlando

 

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I do wonder if that is part of it.  My whole family gets the flu shot every year, no big deal at all.
 
Orlando
 
I got the flu so freaking bad,I mean so bad I'm 2019, March 2019 that I vowed never ever to go without the flu shot. I mean is it 100%, of course not but I can't take the chance again. I was out of work for 6 days early in the year and I was hurting bad. I don't remember ever having the flu that bad before. Then it turned into to bronchitis. What a disaster.
So now when we sit there at Walgreens, my wife and son too, to get the flu shot we will sit just a few minutes longer for the Covid vaccine. No biggie to me at all.
Oh my son, he was 5 at the time got the flu first, probably from school, gave it to me and then my wife. Somehow my mom didn't get it and she was around us all a little bit. Thank God she didn't though. Now we all go together to get the flu shot and smile as we get it. [emoji3][emoji3][emoji3]

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NCL might survive if they drop their final payment date to 30 days. No way will they survive with the amount of cancellations that will continue into next year due to the ridiculous 4 month mandatory final payment date. Even as bad as people will want to go or even plan to go that ridiculous policy will scare 90% of cruisers away. Nobody in their right mind would hand over thousands that far in advance anymore. 

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On 7/22/2020 at 9:31 PM, sfaaa said:

 As soon as a vaccine is found, cruise lines will be back in business

 

They haven`t found a real effective vaccine against the flu in 30 years, so i severely doubt that they will find something against corona which will really help.

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58 minutes ago, 4774Papa said:

Likely vaccines in 2021 and time to travel once more.


Problem is even once available there won’t be enough doses for a long time. Healthcare staff, high risk groups, and essential workers will get first access. Probably 6 to 12 months after initial doses or more before most people get a shot.

Edited by pmd98052
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On 7/22/2020 at 9:15 AM, luv2kroooz said:

If demand doesn't return, the cruise lines are toast.

 

And that is the challenge. I was listening to the CEO of Delta this AM and his comment was very clear....we need demand for travel, which we don't currently have.

 

I was also reading about a large Ohio amusement park, Cedar Point. They had implemented an advance reservation system, whereby you needed a reservation to visit. It was their way to control overcrowding. Well, that was also abandoned as they never got close to filling up all their reservation slots since there was not enough demand from consumers.

 

So, once cruising does reopen, they'll need to have demand for the product, a product that will be vastly different from what we've become accustomed to. Probably not an environment where we'd want to spend our vacation days.

The last paragraph.......that's what I'm afraid of, at least for me.  Hope that's not the case but can sure see it happening.

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