Norwegian Cruise Line Sees Less Stormy Seas Ahead

Auditors for Norwegian Cruise Line remove the phrase 'substantial doubt about NCLH’s ability to continue as a going concern' thanks to the company's 'liquidity and management plans.'
Author:
Updated:
Original:

Norwegian Cruise Line  (NCLH) - Get Report said that while it was still experiencing difficult times amid the Covid-19 pandemic and shutdown of the cruise and tourism industries, it was experiencing calmer waters.

In a filing with the Securities and Exchange Commission, the cruise operator said that on advice from accounting firm PriceWaterhouseCoopers it was amending the phrase “substantial doubt about NCLH’s ability to continue as a going concern” within its financial statements, thanks to “NCLH’s liquidity and management plans.”

The updated notes that include the reissued auditor’s report and explanatory paragraph suggest Norwegian may be sailing into slightly calmer waters following a tumultuous first half that all but shuttered its operations globally.

“Management and we previously concluded there was substantial doubt about the Company’s ability to continue as a going concern,” PriceWaterhouseCoopers said in the report, adding that “management has subsequently taken certain actions, which management and we have concluded remove that substantial doubt.”

Norwegian previously warned of a possible bankruptcy in May, but has since raised over $2 billion through cost-cutting efforts and other measures, ensuring the company’s survival through the next year even without revenue.

Even so, Norwegian last month said it was keeping its cruise ships docked through at least the end of September and in some cases through October amid ongoing concerns over the coronavirus and its potential to incubate on cruise ships.

Separately, Norwegian said it was cooperating with ongoing investigations by Florida and other attorneys general related to its marketing practices during the Covid-19 outbreak.

Norwegian and its competitors were leveled with criticism in the early days of the coronavirus pandemic for continuing operations despite public health and safety warnings, and for continuing to accept future bookings.

Meantime, Norwegian rival Carnival  (CCL) - Get Report said Thursday that its Germany-based cruise line AIDA Cruises will resume operations in August, with three ships set to resume sailing.

Shares of Norwegian were down 0.63% at $15.90 in trading on Thursday. Shares of Carnival were down 0.65% at $15.22.