Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: How should we think about costs associated with the revised Disney agreement for the rest of the year?
A: Craig Felenstein, CFO, explained that the payments to National Geographic are now a flat royalty fee, which will fluctuate quarterly. The impact in Q1 is greater and will decrease in later quarters. The significant value from this partnership is expected in 2025 and beyond, leveraging Disney's distribution power.
Q: Can you discuss the acquisition announced this morning and the decision to use capital for this acquisition versus buying back shares?
A: Craig Felenstein, CFO, emphasized a balanced approach to capital deployment, highlighting that the acquisition was made at a favorable multiple, offering significant growth potential. He noted the importance of weighing future growth opportunities against the potential benefits of share buybacks.
Q: Were there any unexpected costs in Q1 that were not anticipated when guidance was given?
A: Craig Felenstein, CFO, mentioned that rising fuel prices were a headwind, but overall, they still feel comfortable with the guidance range provided earlier. The focus remains on filling the remaining 6% of capacity, which comes at a high margin.
Q: What is the strategy regarding the competitive pricing pressures in Antarctica?
A: Sven Lindblad, CEO, noted that despite competitive pressures, their bookings are strong. They have innovated by offering new programs like flights to Antarctica, which allow guests with less time to participate, thus differentiating their offerings without resorting to discounting.
Q: How do you balance the acquisition of land-based businesses with the decision to add new ships?
A: Sven Lindblad, CEO, explained that land acquisitions provide a counterbalance to the maritime business and offer different dynamics, such as fixed costs. The decision to add ships will depend on achieving higher occupancy and ensuring they are filling existing capacity efficiently before expanding.
Q: Can you provide insights into the cost pressures expected in the second half of the year?
A: Craig Felenstein, CFO, anticipates some cost mitigation, with credit card fees and some land company costs being higher in Q1. Improvements in margins in the land business and reduced currency impacts are expected to improve the cost structure in the latter part of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
