Cruise operator Viking shares rise 9% in New York debut

By Mehnaz Yasmin and Granth Vanaik

(Reuters) - Shares of Viking Holdings rose 9% in their debut on the New York Stock Exchange on Wednesday, giving the travel and cruising company a valuation of $11 billion.

Viking opened at $26.15 compared with its initial public offering (IPO) price of $24 in a stellar debut, amid a rebound in stock market listings and at a time when cruise stocks have delivered outsized returns.

Founded in 1997, Viking provides destination-focused itineraries including a shore excursion at every port and an onboard and onshore program through performances of music and art, cooking demonstrations, port talks and guest lectures.

"We have been able to gain ground in bad times, and COVID was not an exception," said Torstein Hagen, Viking’s Chairman and CEO, adding that by 2022 they were back to pre-pandemic levels, which accelerated in 2023, forming the basis for the IPO.

Demand for cruise vacations has been on a record resurgence since COVID subsided and this year appears to be a banner year.

The projected market demand for luxury cruises is expected to increase approximately 75% from 2019 to 2025, according to data from Cruise Line International Association (CLIA).

Travelers (NYSE:TRV) are also opting for more sea-based experiences over expensive land holidays, which has given operators ample room to hike ticket prices, as they look to narrow the pricing gap.

Leading publicly traded cruise operators like Carnival (NYSE:CCL), Royal Caribbean (NYSE:RCL), and Norwegian Cruise Line (NYSE:NCLH) who also manage their own luxury brands have been less impacted by inflation.

Shares of Royal Caribbean, Carnival and Norwegian have risen about 102%, 51% and 16%, respectively, over the past year.

Viking joins a list of companies including Reddit, Loar Holdings and Rubrik that have seen remarkable debuts recently.

Lower borrowing costs, strong company performance and an ebullient market have prompted investors to turn to capital markets after a two-year hiatus in IPO in the United States.

Viking along with some of its existing investors sold 64 million shares at $24 apiece, within its targeted range, to raise $1.54 billion in its IPO.

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The company, backed by private equity firm TPG and Canada Pension Plan Investment Board, reported 2023 revenue at $4.71 billion compared with $3.18 billion a year earlier.

Net loss in the same period was $1.86 billion, versus a profit of $398.5 million in 2022, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew nearly three-fold.