Royal Caribbean is working to meet the CDC’s terms of resuming cruises, but “many uncertainties remain about the specifics, timing and costs of implementing the requirements.” Here a Royal Caribbean ship is moored in the Port of Miami.
Daniel Slim / AFP via Getty Images
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Hit hard by the pandemic,
Royal Caribbean Group
lost $ 1.1 billion, or $ 5.02 per share, in the fourth quarter on an adjusted basis, compared to earnings of $ 1.42 per share a year earlier, as revenue went from $ 2.5 billion to $ 34. 1 million fell.
Royal Caribbean (ticker: RCL), like its competitors, has suspended most of its operations for nearly a year due to Covid. With most of its fleet idle, the company burns hundreds of millions of cash every month.
In a press release on Monday, the Miami-based company estimated its monthly cash burn at $ 250 million to $ 290 million “during a prolonged suspension of operations.”
As of December 31, the company’s liquidity was approximately $ 4.4 billion. Last year, Royal Caribbean raised approximately $ 9.3 billion in new capital, including debt and equity, to bolster its liquidity.
Royal Caribbean has not provided financial guidance for the year, except that it expects to have losses based on generally accepted accounting principles and adjusted basis for the first quarter and full year 2021. CFO Jason Liberty told analysts during the company’s fourth quarter earnings say Monday morning that “the timing and trajectory of the recovery remains uncertain”.
By mid-morning, shares of Royal Caribbean were up 10%, about $ 86.60.
CEO Richard Fain told analysts much has happened since a Covid protocol panel sponsored by Royal Caribbean and
Norwegian Cruise Line Holdings
(NCLH) released its recommendations last fall. Since then, Covid vaccines have begun to be introduced.
“We will continue to work with the panel” and “to find the safest way forward in the new environment after vaccination when we can protect our guests and crew like never before,” said Fain, adding that the company has successfully resumed some cruises . from Singapore.
An important question is when Royal Caribbean can resume operations in and out of US ports. The Centers for Disease Control and Prevention issued a conditional sailing order in late October, but the timing remains uncertain.
The company said it “continues to prepare and develop its plan to meet the framework” of that order.
“While the framework is an important step towards return to service, many uncertainties remain about the specifics, timing and costs of implementing the requirements,” the statement said.
Royal said it expects to resume its global cruise operations “in a phased manner, with the first cruises featuring reduced guest occupancy, revised itineraries and improved health and safety protocols”.
Cruise operators recently suffered a setback when the Canadian government extended the ban on large cruise ships for a year. That likely affects Alaska cruises, which are popular in the summer.
Royal Caribbean said in its press release on Monday that bookings for the second half of this year are “in line with the company’s expected resumption of cruises.”
On a GAAP basis, Royal Caribbean lost $ 6.09 per share in the fourth quarter, compared to earnings of $ 1.30 per share a year earlier.
For all of 2020, the company lost $ 27.05 per share on a GAAP basis and $ 18.31 on an adjusted basis, reflecting the massive impact of the pandemic shutdown.
In 2019, before the pandemic hit, the company made $ 8.95 on a GAAP basis and $ 9.54 on an adjusted basis.
Corrections and reinforcements
Royal Caribbean raised approximately $ 9.3 billion in new capital last year. An earlier version of this article incorrectly omitted the billion.
Write to Lawrence C. Strauss at [email protected]