EUR 203.58 For Business Accounts Only

3Q17 - Good volumes but EBITDA growth again disappointing; credit view downgraded

Hurtigruten, the Norwegian cruise operator, held a conference call yesterday to present its 3Q17 results. In the company’s seasonally strongest quarter of the year (70% of EBITDA) demand for its unique cruises around the Norwegian coast was once again healthy. This allowed the company to increase prices, which in addition to higher volumes sent the top-line 5.5% higher year on year, to NOK 1.6bn. That said, developments on a normalized EBITDA front were slightly disappointing with only 2.2% year on year growth to NOK 578m as Hurtigruten was burdened by higher bunker costs and the implementation of a new CO2 tax on the Norwegian Coast. Free cashflow was again negative at NOK -68m, mostly due to NOK 124m of advance payments related to the newbuilds.  The company’s published figure for net leverage is 5.8x, c. 0.5x above the last quarter as it now counts charter obligations on boats outside of the restricted group as reported debt.