Viking Holdings Ltd (the “Company” or “Viking”) (NYSE: VIK)
today reported financial results for the first quarter ended March
31, 2024.
Key Highlights
- Adjusted Gross Margin for the first quarter of 2024 increased
19.1% compared to the same period in 2023, resulting in a Net Yield
of $508.
- Adjusted EBITDA increased by $46.1 million compared to the
first quarter of 2023.
- Net Leverage declined from 3.8x as of December 31, 2023 to 3.4x
as of March 31, 2024.
- As of May 19, 2024, for the 2024 and 2025 seasons, Viking had
sold 91% and 39%, respectively, of its Capacity Passenger Cruise
Days for its Core Products.
“We are pleased with our performance in the first quarter,
during which we reported a Net Yield of $508, and our strong
Advanced Bookings for 2024 and 2025 are equally encouraging,” said
Torstein Hagen, Chairman and CEO of Viking. “At Viking, we remain
committed to prioritizing our guests and treating our employees as
integral members of our family. We embrace a contrarian approach
and steadfastly maintain a long-term perspective when managing our
business. Leveraging our momentum, we are dedicated to shaping
Viking’s next era to deliver value for all of our
stakeholders.”
First Quarter 2024 Consolidated
Results
During the first quarter of 2024, Capacity PCDs increased by
14.5% over the same period in 2023 and Occupancy was 94.0%,
compared to 92.8% for the same period in 2023.
Total revenue for the first quarter of 2024 was $718.2 million,
an increase of $89.2 million, or 14.2%, over the same period in
2023 mainly due to an increase in the size of the Company’s fleet
and higher Occupancy in 2024 compared to 2023.
Gross margin for the first quarter of 2024 was $160.1 million,
an increase of $62.0 million, or 63.2%, over the same period in
2023 and Adjusted Gross Margin for the first quarter of 2024 was
$495.3 million, an increase of $79.6 million, or 19.1%, over the
first quarter of 2023. Net Yield was $508 for the first
quarter.
Vessel operating expenses and vessel operating expenses
excluding fuel for the first quarter of 2024 were $281.1 million
and $239.0 million, respectively. Compared to the same period in
2023, vessel operating expenses increased $17.9 million, or 6.8%,
and vessel operating expenses excluding fuel increased $17.2
million, or 7.8%.
Net loss was $493.9 million compared to $214.4 million for the
same period in the prior year. The 2024 first quarter net loss
includes a loss of $330.5 million and the 2023 first quarter
includes a gain of $15.5 million related to the net impact of the
Private Placement derivative (loss) gain and interest expense
related to the Company’s Series C Preference Shares. The Company’s
Series C Preference Shares converted into ordinary shares
immediately prior to the consummation of the Company’s initial
public offering (“IPO”), which was subsequent to the first quarter
of 2024.
Adjusted EBITDA increased by $46.1 million over the first
quarter of 2023. The increase in Adjusted EBITDA was mainly due to
higher Capacity PCDs and higher Net Yield.
Our first quarter results reflect the seasonality of our
business. While our ocean, expedition and Mississippi products
operate year-round, the primary cruising season for our river
product is from April to October, although some of our river
cruises run longer seasons. Additionally, our highest Occupancy
occurs during the Northern Hemisphere’s summer months. We recognize
cruise-related revenue over the duration of the cruise and expense
our marketing and employee costs when the related costs are
incurred. As a result, the majority of our revenue and profits have
historically been earned in the second and third quarters of each
year.
Update on Operating Capacity and
Bookings
For our Core Products, operating capacity is 5% higher for the
2024 season in comparison to the 2023 season and 12% higher for the
2025 season in comparison to the 2024 season.
For our Core Products, as of May 19, 2024, for the 2024 and 2025
seasons, we had sold 91% and 39%, respectively, of our Capacity
PCDs and had $4,573 million and $2,481 million, respectively, of
Advance Bookings. Advance Bookings were 15% and 27% higher in
comparison to the 2023 and 2024 seasons, respectively, at the same
point in time. Advance Bookings per PCD for the 2024 season was
$742, 9% higher than the 2023 season at the same point in time, and
Advance Bookings per PCD for the 2025 season was $852, 12% higher
than the 2024 season at the same point in time.
Balance Sheet and
Liquidity
On May 3, 2024, Viking closed its $1.8 billion initial public
offering, with net proceeds of approximately $245.5 million to
Viking and approximately $1.4 billion to certain selling
shareholders.
As of March 31, 2024:
- The Company had $1.7 billion in cash and cash equivalents,
which does not include the proceeds of the IPO.
- The scheduled principal payments for the remainder of 2024 and
2025 were $196.4 million and $489.0 million, respectively.
- Deferred revenue was $4.1 billion.
In May 2024, S&P upgraded Viking Cruises Ltd’s corporate
rating to BB- from B+.
“We are excited to share strong first-quarter financial results,
which are a testament to the great demand for our products and
brand,” said Leah Talactac, CFO of Viking. “Also, strengthening our
balance sheet continues to be a priority as evidenced by our cash
balance and reduction in Net Leverage. We are also very pleased by
the S&P credit rating upgrade. These achievements underscore
our dedication to financial prudence and our pursuit of sustainable
growth.”
New Build Update
Based on the committed orderbook, the Company expects to take
delivery of two river vessels and one ocean ship this year.
Conference Call Information
The Company has scheduled a conference call for Wednesday, May
29, 2024, at 8 a.m. Eastern Time to discuss first quarter 2024
results and provide a business update. A link to the live webcast
can be found on the Company’s Investor Relations website at
https://ir.viking.com/. A replay of the conference call will also
be available on the same website for 30 days after the call.
About Viking
Viking was founded in 1997 and provides destination-focused
journeys on rivers, oceans and lakes around the world. Designed for
curious travelers with interests in science, history, culture and
cuisine, Viking offers experiences for The Thinking Person™. Viking
has more than 450 awards to its name, including being rated #1 for
Rivers, #1 for Oceans and #1 for Expeditions by Condé Nast Traveler
in the 2023 Readers' Choice Awards. Viking is also rated at the top
of its categories for rivers, oceans and expeditions by Travel +
Leisure. No other travel company has simultaneously received the
same honors by both publications. For additional information, visit
www.viking.com.
Definitions
“Adjusted EBITDA” is EBITDA (consolidated net income (loss)
adjusted for interest income, interest expense, income tax benefit
(expense) and depreciation, amortization and impairment) as further
adjusted for non-cash Private Placement derivative gains and
losses, loss on Private Placement refinancing, currency gains or
losses, stock-based compensation expense and other financial income
(loss) (which includes forward gains and losses, gain or loss on
disposition of assets, certain non-cash fair value adjustments,
restructuring charges and non-recurring items).
“Adjusted Gross Margin” is gross margin adjusted for vessel
operating expenses and ship depreciation and impairment. Gross
margin is calculated pursuant to IFRS as total revenue less total
cruise operating expenses and ship depreciation and impairment.
“Advance Bookings” is the aggregate ticketed amount for guest
bookings for our voyages at a specific point in time, and include
bookings for cruises, land extensions and air.
“Capacity PCDs” is, with respect to any given period, a
measurement of capacity that represents, for each ship operating
during the relevant period, the number of berths multiplied by the
number of Ship Operating Days, determined on an aggregated basis
for all ships in operation during the relevant period.
“Core Products” are Viking River, Viking Ocean, Viking
Expedition and Viking Mississippi, which are marketed to North
America, the United Kingdom, Australia and New Zealand.
“Net Debt” is Total Debt plus lease liabilities net of cash and
cash equivalents.
“Net Leverage” is Net Debt divided by trailing four quarter
Adjusted EBITDA.
“Net Yield” is Adjusted Gross Margin divided by PCDs.
“Occupancy” is the ratio, expressed as a percentage, of PCDs to
Capacity PCDs with respect to any given period. We do not allow
more than two passengers to occupy a two-berth stateroom.
Additionally, we have guests who choose to travel alone and are
willing to pay higher prices for single occupancy in a two-berth
stateroom. As a result, our Occupancy cannot exceed 100%, and may
be less than 100%, even if all our staterooms are booked.
“Passenger Cruise Days” or “PCDs” is the number of passengers
carried for each cruise, with respect to any given period and for
each ship operating during the relevant period, multiplied by the
number of Ship Operating Days.
“Ship Operating Days” is the number of days within any given
period that a ship is in service and carrying cruise passengers,
determined on an aggregated basis for all ships in operation during
the relevant period.
“Total Debt” is indebtedness outstanding, gross of loan fees,
excluding lease liabilities, Private Placement liabilities and
Private Placement derivatives.
Non-IFRS Financial Measures
We use certain non-IFRS financial measures, such as Adjusted
Gross Margin, Net Yield and Adjusted EBITDA, to analyze our
performance. We present Adjusted EBITDA as a performance measure
because we believe it facilitates a comparison of our consolidated
operating performance on a consistent basis from period-to-period
and provides for a more complete understanding of factors and
trends affecting our business than measures under IFRS can provide
alone. We also believe that Adjusted EBITDA is useful to investors
in evaluating our operating performance because it provides a means
to evaluate the operating performance of our business on an ongoing
basis using criteria that our management uses for evaluation and
planning purposes. Because Adjusted EBITDA facilitates internal
comparisons of our historical financial position and consolidated
operating performance on a more consistent basis, our management
also uses Adjusted EBITDA in measuring our performance relative to
that of our competitors, assessing our ability to incur and service
our indebtedness and in communications with our board of directors
concerning our operating performance. We utilize Adjusted Gross
Margin and Net Yield to manage our business because these measures
reflect revenue earned net of certain direct variable costs.
We also present certain non-IFRS financial measures because we
believe that they are widely used by certain investors, securities
analysts and other interested parties as supplemental measures of
performance and liquidity. Our non-IFRS financial measures have
limitations as analytical tools, may not be comparable to other
similarly titled measures of other companies and should not be
considered in isolation or as a substitute for analysis of our
operating results as reported under IFRS.
See “Definitions” for additional information about our non-IFRS
financial measures and “Non-IFRS Reconciling Information” for a
reconciliation for each non-IFRS financial measure to the most
directly comparable IFRS financial measure.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this press release constitute
“forward-looking statements” within the meaning of the U.S. federal
securities laws intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include, but are not
limited to, all statements other than statements of historical
facts contained in this press release, including among others,
statements relating to our future financial performance, our
business prospects and strategy, our expected fleet additions, our
anticipated financial position, liquidity and capital needs and
other similar matters. In some cases, we have identified
forward-looking statements in this press release by using words
such as “anticipates,” “estimates,” “expects,” “intends,” “plans”
and “believes,” and similar expressions or future or conditional
verbs such as “will,” “should,” “would,” “may” and “could.” These
forward-looking statements are based on management’s current
expectations and assumptions about future events, which are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict or which are beyond our
control. You should not place undue reliance on the forward-looking
statements included in this press release or that may be made
elsewhere from time to time by us, or on our behalf. Our actual
results may differ materially from those expressed in, or implied
by, the forward-looking statements included in this press release
as a result of various factors, including the factors described in
the sections titled “Cautionary Statement Regarding Forward-Looking
Statements” and “Risk Factors” in our final prospectus filed on May
2, 2024 with the U.S. Securities and Exchange Commission pursuant
to Rule 424(b)(4) under the Securities Act of 1933, as amended,
relating to our Registration Statement on Form F-1.
Forward-looking statements speak only as of the date of this
press release. Except as required by law, we assume no obligation
to update or revise these forward-looking statements for any
reason, even if new information becomes available in the future.
All forward-looking statements attributable to us are expressly
qualified by these cautionary statements.
VIKING HOLDINGS LTD
INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in USD and thousands, except
per share data, unaudited)
Three Months Ended
March 31,
2024
2023
Revenue
Cruise and land
$
665,284
$
583,877
Onboard and other
52,871
45,117
Total revenue
718,155
628,994
Cruise operating expenses
Commissions and transportation costs
(137,408
)
(138,523
)
Direct costs of cruise, land and
onboard
(85,427
)
(74,755
)
Vessel operating
(281,090
)
(263,209
)
Total cruise operating expenses
(503,925
)
(476,487
)
Other operating expenses
Selling and administration
(219,818
)
(205,670
)
Depreciation and amortization
(64,911
)
(62,699
)
Total other operating expenses
(284,729
)
(268,369
)
Operating loss
(70,499
)
(115,862
)
Non-operating income (expense)
Interest income
18,469
8,804
Interest expense
(117,489
)
(123,593
)
Currency gain (loss)
8,798
(3,441
)
Private Placement derivative (loss)
gain
(306,646
)
39,159
Other financial loss
(24,955
)
(16,566
)
Loss before income taxes
(492,322
)
(211,499
)
Income tax expense
(1,606
)
(2,868
)
Net loss
$
(493,928
)
$
(214,367
)
Net loss attributable to Viking Holdings
Ltd
$
(494,224
)
$
(214,228
)
Net income (loss) attributable to
non-controlling interests
$
296
$
(139
)
Weighted-average ordinary and special
shares outstanding (in thousands)
Basic
221,936
221,936
Diluted
221,936
406,203
Net loss per share attributable to
ordinary and special shares
Basic
$
(1.21
)
$
(0.52
)
Diluted
$
(1.21
)
$
(0.56
)
VIKING HOLDINGS LTD
INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)
(in USD and thousands,
unaudited)
Three Months Ended
March 31,
2024
2023
Net loss
$
(493,928
)
$
(214,367
)
Other comprehensive income (loss)
Other comprehensive income (loss) to be
reclassified to net income (loss) in subsequent periods:
Exchange differences on translation of
foreign operations
2,664
241
Net change in cash flow hedges
(13,267
)
1,701
Net other comprehensive (loss) income to
be reclassified to net income (loss) in subsequent periods
(10,603
)
1,942
Other comprehensive (loss) income, net of
tax
(10,603
)
1,942
Total comprehensive loss
$
(504,531
)
$
(212,425
)
Total comprehensive loss attributable to
Viking Holdings Ltd
$
(504,819
)
$
(212,289
)
Total comprehensive income (loss)
attributable to non-controlling interests
$
288
$
(136
)
VIKING HOLDINGS LTD
INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
(in USD and thousands,
unaudited)
March 31, 2024
December 31, 2023
Assets
(audited)
Non-current assets
Property, plant and equipment and
intangible assets
$
5,717,855
$
5,684,315
Right-of-use assets
264,559
268,834
Investments in associated companies
9,780
10,473
Deferred tax assets
52,145
42,853
Other non-current assets
136,826
136,855
Total non-current assets
6,181,165
6,143,330
Current assets
Cash and cash equivalents
1,673,594
1,513,713
Accounts and other receivables
352,108
344,754
Inventories
54,173
54,602
Prepaid expenses and other current
assets
513,718
427,202
Current receivables due from related
parties
7,893
12,316
Total current assets
2,601,486
2,352,587
Total assets
$
8,782,651
$
8,495,917
Shareholders' equity and
liabilities
Shareholders' equity
$
(5,842,786
)
$
(5,349,879
)
Non-current liabilities
Long-term portion of bank loans and
financial liabilities
1,666,795
1,757,372
Secured Notes
1,016,108
1,015,657
Unsecured Notes
2,271,557
2,270,246
Private Placement liability
1,397,101
1,394,552
Private Placement derivative
2,947,405
2,640,759
Long-term portion of lease liabilities
221,248
227,956
Deferred tax liabilities
3,627
4,082
Other non-current liabilities
201,338
171,281
Total non-current liabilities
9,725,179
9,481,905
Current liabilities
Accounts payables
187,772
244,581
Short-term portion of bank loans and
financial liabilities
259,823
253,020
Short-term portion of lease
liabilities
24,433
24,670
Deferred revenue
4,068,117
3,486,579
Accrued expenses and other current
liabilities
360,113
355,041
Total current liabilities
4,900,258
4,363,891
Total shareholders' equity and
liabilities
$
8,782,651
$
8,495,917
VIKING HOLDINGS LTD
INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in USD and thousands,
unaudited)
Three Months Ended
March 31,
2024
2023
Cash flows from operating
activities
Net loss
$
(493,928
)
$
(214,367
)
Adjustments to reconcile net loss to net
cash flows
Depreciation and amortization
64,911
62,699
Amortization of debt transaction costs
9,075
9,248
Private Placement derivative loss
(gain)
306,646
(39,159
)
Foreign currency (gain) loss on loans
(15,579
)
5,648
Non-cash financial loss
23,054
12,492
Stock based compensation expense
3,518
6,793
Interest income
(18,469
)
(8,804
)
Interest expense
108,414
114,345
Dividend income
(421
)
(918
)
Changes in working capital:
Increase in deferred revenue
581,538
453,229
Changes in other liabilities and
assets
(120,292
)
(194,240
)
Decrease (increase) in inventories
429
(5,960
)
Changes in deferred tax assets and
liabilities
(921
)
(1,472
)
Changes in other non-current assets and
other non-current liabilities
12,255
16,080
Changes in related party receivables and
payables
4,423
10,841
Income taxes paid
(1,622
)
(1,334
)
Net cash flow from operating
activities
463,031
225,121
Cash flows from investing
activities
Investments in property, plant and
equipment and intangible assets
(95,413
)
(125,741
)
Capital contribution to associated
company
(4,000
)
(5,000
)
Prepayment for vessel charter
(604
)
-
Dividends received
421
918
Interest received
18,064
8,804
Net cash flow used in investing
activities
(81,532
)
(121,019
)
Cash flows from financing
activities
Repayment of borrowings
(72,959
)
(86,538
)
Dividend distribution by subsidiary
(720
)
-
Principal payments for lease
liabilities
(6,280
)
(6,916
)
Interest payments for lease
liabilities
(5,368
)
(5,974
)
Interest paid
(133,920
)
(99,260
)
Net cash flow used in financing
activities
(219,247
)
(198,688
)
Change in cash and cash equivalents
162,252
(94,586
)
Effect of exchange rate changes on cash
and cash equivalents
(2,371
)
1,744
Net increase (decrease) in cash and cash
equivalents
$
159,881
$
(92,842
)
Cash and cash equivalents
Cash and cash equivalents at January 1
$
1,513,713
$
1,253,140
Cash and cash equivalents at March 31
1,673,594
1,160,298
Net increase (decrease) in cash and cash
equivalents
$
159,881
$
(92,842
)
The following table sets forth selected statistical and
operating data (1) on a consolidated basis, (2) for Viking River
and (3) for Viking Ocean.
Statistical and Operating Data
Three Months Ended March
31,
2024
2023
(unaudited)
Consolidated
Vessels operated
75
71
Passengers
90,449
79,630
PCDs
974,977
841,263
Capacity PCDs
1,037,624
906,606
Occupancy
94.0
%
92.8
%
Adjusted Gross Margin (in thousands)
$
495,320
$
415,716
Net Yield
$
508
$
494
Vessel operating expenses (in
thousands)
$
281,090
$
263,209
Vessel operating expenses excluding fuel
(in thousands)
$
239,037
$
221,806
Vessel operating expenses per Capacity
PCD
$
271
$
290
Vessel operating expenses excluding fuel
per Capacity PCD
$
230
$
245
Viking River
Vessels operated
63
60
Passengers
26,896
23,254
PCDs
177,519
136,407
Capacity PCDs
192,806
145,964
Occupancy
92.1
%
93.5
%
Adjusted Gross Margin (in thousands)
$
108,170
$
80,938
Net Yield
$
609
$
593
Viking Ocean
Vessels operated
9
8
Passengers
56,467
48,978
PCDs
718,188
627,707
Capacity PCDs
759,810
668,670
Occupancy
94.5
%
93.9
%
Adjusted Gross Margin (in thousands)
$
315,591
$
266,783
Net Yield
$
439
$
425
Non-IFRS Reconciling Information
The following tables reconcile gross margin, the most directly
comparable IFRS measure, to Adjusted Gross Margin for the three
months ended March 31, 2024 and 2023 (1) on a consolidated basis,
(2) for Viking River and (3) for Viking Ocean:
Consolidated
Three Months Ended
March 31,
2024
2023
(unaudited)
(in thousands)
Total revenue
$
718,155
$
628,994
Total cruise operating expenses
(503,925
)
(476,487
)
Ship depreciation
(54,096
)
(54,390
)
Gross margin
160,134
98,117
Ship depreciation
54,096
54,390
Vessel operating
281,090
263,209
Adjusted Gross Margin
$
495,320
$
415,716
Viking River
Three Months Ended
March 31,
2024
2023
(unaudited)
(in thousands)
Total revenue
$
165,431
$
130,286
Total cruise operating expenses
(162,251
)
(147,518
)
Ship depreciation
(20,517
)
(23,409
)
Gross margin
(17,337
)
(40,641
)
Ship depreciation
20,517
23,409
Vessel operating
104,990
98,170
Adjusted Gross Margin
$
108,170
$
80,938
Viking Ocean
Three Months Ended
March 31,
2024
2023
(unaudited)
(in thousands)
Total revenue
$
447,680
$
397,632
Total cruise operating expenses
(267,409
)
(259,271
)
Ship depreciation
(24,914
)
(22,806
)
Gross margin
155,357
115,555
Ship depreciation
24,914
22,806
Vessel operating
135,320
128,422
Adjusted Gross Margin
$
315,591
$
266,783
The following table reconciles vessel operating expenses
excluding fuel to vessel operating expenses, the most directly
comparable IFRS measure, for the three months ended March 31, 2024
and 2023:
Three Months Ended
March 31,
2024
2023
(unaudited)
(in thousands)
Vessel operating expenses
$
281,090
$
263,209
Fuel expense
(42,053
)
(41,403
)
Vessel operating expenses excluding
fuel
$
239,037
$
221,806
The following table reconciles net loss, the most directly
comparable IFRS measure, to Adjusted EBITDA for the three months
ended March 31, 2024 and 2023:
Three Months Ended
March 31,
2024
2023
(unaudited)
(in thousands)
Net loss
$
(493,928
)
$
(214,367
)
Interest income
(18,469
)
(8,804
)
Interest expense
117,489
123,593
Income tax expense
1,606
2,868
Depreciation and amortization
64,911
62,699
EBITDA
(328,391
)
(34,011
)
Private Placement derivatives loss
(gain)
306,646
(39,159
)
Other financial loss
22,604
12,375
Currency (gain) loss
(8,798
)
3,441
Stock based compensation expense
3,518
6,793
Adjusted EBITDA
$
(4,421
)
$
(50,561
)
The following table calculates Net Leverage for the twelve
months ended March 31, 2024 and December 31, 2023:
March 31, 2024
December 31, 2023
(unaudited)
(in thousands, except Net
Leverage)
Long-term debt (1)
$
5,061,200
$
5,155,673
Current portion of long-term debt (1)
276,826
270,888
Long-term portion of lease liabilities
221,248
227,956
Short-term portion of lease
liabilities
24,433
24,670
Total
5,583,707
5,679,187
Less: Cash and cash equivalents
(1,673,594
)
(1,513,713
)
Net Debt
$
3,910,113
$
4,165,474
Adjusted EBITDA
$
1,136,462
$
1,090,322
Net Leverage
3.4
3.8
(1)
All amounts are gross of fees.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240529910842/en/
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