Havila Kystruten (HKY) Q2 2024 earnings summary

Executive summary

• Achieved first-ever positive EBITDA in Q2 2024, with revenue reaching MNOK 369, up from MNOK 172 year-over-year, and 94% operational uptime.

• Revenue growth driven by higher occupancy (69% vs. 62%) and increased average cabin revenue (NOK 5,200 vs. NOK 4,500) year-over-year.

• Recognized by TIME Magazine as a top global destination for sustainable cruise innovation.

• Sustainability focus led to a 36% reduction in CO2 emissions versus 2017 and food waste of 70g per guest night.

• 70% of 2024 capacity sold by August, with average occupancy for 2024 expected at 75%.

Financial highlights

• Q2 2024 revenue: MNOK 369 (including MNOK 97 from Ministry of Transport); Q2 EBITDA: MNOK 58.4 (up from -MNOK 15); Q2 EBITDA margin reached 16%.

• Revenue per cabin night and occupancy rates improved year-over-year.

• Q2 2024 net loss before tax: MNOK -99; H1 2024 net loss: MNOK -458.

• Interest expenses for H1 totaled NOK 165.7 million; current mortgage debt interest rate is around 12.5%.

• Cash and cash equivalents at period end: MNOK 280; overdraft facility of MNOK 200 with MNOK 150 drawn at Q2 end.

Outlook and guidance

• Q3 expected to be the strongest quarter due to seasonality, with positive EBITDA anticipated.

• 2024 occupancy guidance is 75%, slightly down from previous guidance due to group allocation cancellations.

• 2025 bookings are ahead of last year's pace, with improved underlying occupancy and pricing expected.

• Strategy includes offering shorter trips, targeting higher-paying travelers, and increasing southbound occupancy.

• Management remains optimistic about further margin improvement and top-line growth next year.