Norwegian Cruise Line Holdings Ltd (NCLH)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	910,257	166,178	-2,269,910	-4,506,590	-4,012,510
Total stockholders’ equity	US$ in thousands	1,425,440	300,807	68,591	2,432,650	4,354,100
ROE		63.86%	55.24%	-3,309.34%	-185.25%	-92.15%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $910,257K ÷ $1,425,440K
= 63.86%

The return on equity (ROE) for Norwegian Cruise Line Holdings Ltd experienced significant fluctuations over the years.

In December 2020, the company's ROE was at a negative 92.15%, indicating that the company was experiencing challenges in generating profits relative to its shareholders' equity. This negative ROE suggests that the company was not efficiently utilizing its equity to generate returns for its shareholders.

The following year, in December 2021, the ROE took a further dip to -185.25%, indicating continued challenges in profitability and operational efficiency. This sharp decline in ROE underscores the difficulties faced by the company, potentially due to external factors such as the impact of the global pandemic on the cruise industry.

By December 2022, the ROE improved drastically to -3,309.34%, a significant rebound from the previous year. This improvement, while still negative, signals a potential turnaround in the company's profitability and efficiency in utilizing its equity.

The trend continued in December 2023, with the ROE turning positive at 55.24%, showing a strong recovery in the company's ability to generate profits relative to the shareholders' equity. This positive ROE indicates that the company was able to effectively leverage its equity to create value for its shareholders.

In December 2024, the ROE further improved to 63.86%, demonstrating sustained growth and profitability for the company. This positive trend indicates that Norwegian Cruise Line Holdings Ltd was able to enhance its operational performance and create value for shareholders through efficient equity utilization.

Overall, the analysis of Norwegian Cruise Line Holdings Ltd's ROE reveals a volatile performance over the years, with a notable turnaround from negative to positive ROE, reflecting improvements in profitability and efficiency in utilizing shareholders' equity.