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RCCL raises 2015 EPS forecast to $4.80 per share

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 23 October 2015 23 October 2015

Royal Caribbean Cruises, Ltd. (RCCL), the world’s second largest cruise shipping company, says it has raised its 2015 earnings per share (EPS) forecast to $4.80 per share from an earlier forecast of $4.65 to $4.70.

"As we have reiterated throughout the year, we remain ahead on both pricing and volume versus same time last year," said Jason T. Liberty, chief financial officer. "While Latin America is stressing yields in the fourth quarter, strong year-over-year pricing in the Caribbean, and the addition of capacity in China, will solidify this fourth quarter as the best in our company's history."

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2015 Adjusted EPS to be approximately $4.80 per share.

The company is experiencing good early booking trends for 2016. Booked load factors and APDs are higher than same time last year and the booking window has extended.

 Management is excited by the 2016 introduction of Harmony of the Seas starting in Europe next summer and adding Ovation of the Seas to its Chinese platform to take advantage of the strong reception this class of ships has received there.

While still early in the booking cycle, the view for 2016 is encouraging, and the company expects another year of solid yield and earnings growth.

"As we turn the corner into 2016 we have our sights firmly set on our 2017 Double-Double targets," said Richard D. Fain, chairman and chief executive officer. "Next year represents a positive step on that journey."

RCCL reports fall in third quarter, nine month profit on Pullmantur charge

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 23 October 2015 23 October 2015

Royal Caribbean Cruises, Ltd (RCCL), the world’s second largest cruise shipping group, has reported a fall in third quarter and nine months net result on a heavy impairment charge of its Pullmantur brand.

Group net profit fell to $228.8 million in third quarter to $490.2 million, while revenues rose to $2.52 billion from $2.38 billion. The company booked impairment charges of $399.3 million related to Pullmantur, its Spain and Latin America focused brand and its assets.

In the first nine months of the year, the profit fell to $458.9 million from $654.4 million, while revenues rose to $6.39 billion from $6.26 billion.

“Net Yields on a Constant-Currency basis increased 5.1% during the quarter, approximately 130 basis points better than the mid-point of previous guidance. Close-in Caribbean and European demand and strong performance in Asia more than off-set further weakness in Latin America,” the company said in a statement.

“Onboard Revenue Yield increased 10% mainly driven by strong retail and beverage sales and demand for VOOM, the fastest internet at sea,” RCCL said. Year-over-year, the company has made a number of structural changes which are driving a stronger fourth quarter. The growth of the Asia-Pacific region, including Quantum of the Seas sailing in China, boosts earnings in the typically lighter shoulder season.

The addition of new capacity, with Anthem of the Seas joining the fleet, efforts to drive incremental Onboard Revenue, and a continued focus on cost efficiencies also contribute to a stronger end of the year.

RCCL books $400 million impairment charge against Pullmantur and its fleet

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 23 October 2015 23 October 2015

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, has booked a $400 million impairment charge against the assets and brand name of Pullmantur, its Spain and Latin America focused brand.

“The Company conducts an analysis of the carrying value of its assets on a regular basis. In past quarters, management has acknowledged the weakness in the economies of Latin America, and the impact of this weakness on Pullmantur. Unfortunately, the economic outlook in Latin America has deteriorated further in recent months and, as a result, the brand is re-focusing on its core market of Spain. These factors triggered the company to record a non-cash impairment charge of $399.3 million, primarily related to its goodwill, its trademark and trade names and a reduction in the carrying value of select vessels in the Pullmantur fleet,” the company said in a statement, it said, adding that this eliminates all intangibles at Pullmantur.

 “As the company right-sizes the brand, restructuring and related charges of approximately $5 to $10 million associated with the new strategy will be booked in future quarters. In addition, as previously anticipated, we will be eliminating the two-month reporting lag for the Pullmantur brand,” RCCL said.

This will start in the first quarter of 2016, and is expected to be immaterial to the company's results. All the adjustments will be excluded from our key metrics for transparency and comparability purposes. "The right-sizing of the Pullmantur fleet will better balance supply with demand for the brand in the Spanish market," said Richard D. Fain, chairman and chief executive officer. "These changes should put Pullmantur on a more successful course for the future."

Carnival plc's Chinese joint venture could follow AIDA Cruises' model

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 21 October 2015 21 October 2015

The new cruise brand Carnival Corporation & plc's British holding company Carnival plc and its two Chinese business partners will launch in China could be based on the model of AIDA Cruises, the Carnival group's German brand, said Alan Buckelew, COO of Carnival Corporation & plc.

"We think there's an opportunity for an AIDA type brand, more focused on the Chinese market than international but we need to do research on that. In many categories, products made in China are not seen as having the same value and quality as those abroad. Services are a different animal than products," Buckelew said at a conference call today.

AIDA Cruises features food market type dining, with table service alternative dining options at an extra charge.

"This new brand won't be of any scale for five to 10 years. Initially it won't have any impact. We think that developing the China market is a very positive thing for the cruise industry. It opens up a large, vibrant market. Allows us to further diversify our sourcing."

Moving on to recent news about China's economic setbacks, Buckelew said: "The best proxy for us is outbound tourism, up 12% this year. Our yields remain strong. We put our ships where we can earn the most money. We made that investment with Costa where we were willing to take losses. We don't take losses for strategic growth anymore. The beauty of our industry is if China was to slow down we could move our ships somewhere else