Royal Caribbean Group expects 2021 loss

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Written by Kari Reinikainen Kari Reinikainen

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Published: 22 February 2021 22 February 2021

 

Royal Caribbean Group (RCG), the world’s second largest cruise shipping company, said that booking activity for the second half of 2021 is aligned with its anticipated resumption of cruising, but added that a 2021 loss appears likely.

“Pricing on these bookings is higher than 2019 both including and excluding the dilutive impact of future cruise credits (FCCs),” it said in a statement, referring to bookings for the second half of this year.

“While the brands are still in the process of opening for sale the remainder of their 2022/2023 seasons, first and second quarter 2022 sailings have been open for some time. Cumulative advance bookings for the first half of 2022 are within historical ranges and at higher prices. This was achieved with minimal sales and marketing spend which the Company believes highlights a strong long-term demand for cruising,” RCG said

Since the last business update, approximately 75% of bookings made for 2021 are new and 25% are due to the redemption of FCCs and the "Lift & Shift" programme At the end of 2020, RCG had $1.8 billion in customer deposits of which 50% are related to FCCs. “Since the suspension of operations, approximately 53% of the guests booked on cancelled sailings have requested cash refunds,” it said.

RCG’s operation is still subject to the impact of COVID-19.  Consequently, it cannot reasonably estimate its financial or operational results. “Notwithstanding the foregoing, the Company expects to incur a net loss on both a US GAAP and adjusted basis for its first quarter and the 2021 fiscal year, the extent of which will depend on many factors including the timing and extent of the return to service,” it stated.

 

The expected capital expenditures for 2021 are $2.1 billion. These expenditures are mainly driven by our newbuild projects which have committed financing. During 2021, RCG expects the delivery of Odyssey of the Seas and Silver Dawn during the first and fourth quarters, respectively.

Royal Caribbean Group reports deep loss for 2020

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Written by Kari Reinikainen Kari Reinikainen

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Published: 22 February 2021 22 February 2021

 Royal Caribbean Group (RCG), the world’s second largest cruise shipping company, has reported a massive loss in the wake of the Covid-19 pandemic, it said in a statement.

The company reported US GAAP net loss of $5.8 billion or $27.05 per share compared to net income of $1.9 billion or $8.95 per share in the prior year. It also reported adjusted net loss of $3.9 billion or $18.31 per share for full year 2020 compared to adjusted net income of $2.0 billion or $9.54 per share in 2019.

For the final quarter of 2020, US GAAP net loss was $1.4 billion or $6.09 per share and adjusted net loss amounted to $1.1 billion or $5.02 per share. In 2019, RCG reached a $273.1 million net income, or $1.30 per share, in the final quarter, while and adjusted net income was $297.4 million or $1.42 per share for the fourth quarter.

"The COVID-19 pandemic is having a painful and profound impact on our world and our business; unquestionably, this crisis is the most difficult in the Company's history. But we have been impressed and grateful for the resourcefulness and agility of our team in responding to these unprecedented challenges. More importantly, we remain confident about the ability of our Company to recover and return to the positive trajectory we were on previously," said Richard D. Fain, Chairman and CEO.

Since the suspension of its global cruise operation, RCG has taken aggressive actions to enhance its liquidity through significant cost and capital reductions, cash preservation measures and by obtaining additional financing. “During 2020, the Company raised approximately $9.3 billion of new capital through a combination of bond issuances, common stock public offerings and other loan facilities,” it said, adding that given the current environment, it continues to work to bolster its liquidity, so it is well positioned for recovery.

RCG estimates its cash burn to be, on average, in the range of approximately $250 million to $290 million per month during a prolonged suspension of operations. “As the Company starts returning its fleet into service, it has (with respect to existing operations) and will incur incremental spend as it brings the ships out of their various levels of layup, returns the crew to the vessels, takes the necessary steps to ensure compliance with the recommended protocols and gears up its sales and marketing activities,” RCG said.

As of December 31, 2020, RCG had liquidity of approximately $4.4 billion, including $3.7 billion in cash and cash equivalents and a $0.7 billion commitment from a 364-day facility.

Two Carnival brands extend Australia, New Zealand standstill

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Written by Kari Reinikainen Kari Reinikainen

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Published: 22 February 2021 22 February 2021

Two Carnival Corporation & plc group brands have extended their operational standstill in Australia and New Zealand.

P&O Cruises Australia, the group’s Australia and New Zealand focused contemporary market, said it has decided to extend the operational pause to departures on or before 18 June, 2021.

Previously, two of its ships, Pacific Adventure was planned to resume cruising on 30April and Pacific Encounter on 7 May.

The last named vessel has recently completed a transformation in Singapore to join the P&O Cruises Australia fleet. The 2001 built vessel sailed previously as Star Princess of sister brand Princess Cruises.

Information on the P&O Cruises Australia website shows that Pacific Explorer, its third ship, would commence operations on 30 July.

Meanwhile, Carnival Cruise Line has cancelled all Australian sailings departing from 15 March on board Carnival Splendor to 28 June, as well all Carnival Spirit sailings to12 September.

Royal Caribbean, lenders agree to amend three loan facilities

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Written by Kari Reinikainen Kari Reinikainen

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Published: 22 February 2021 22 February 2021

 

Royal Caribbean Cruises Ltd, (RCCL), the world’s second largest cruise shipping group, said it has amended three revolving loan facilities.

These are $1.55 billion unsecured revolving credit facility due 2022 with Nordea Bank ABP, a $1.925 billion unsecured revolving credit facility due 2024 with The Bank of Nova Scotia and a $1.0 billion unsecured term loan due 2022 with Bank of America.

“These amendments, among other things, extend the waiver of the quarterly-tested fixed charge coverage and net debt to capitalization covenants in each Credit Facility through and including the third quarter of 2022 or, if earlier, that date falling after January 1, 2022 on which we elect to comply with the modified covenants (the “Waiver Period”),” the company said in a statement.

“In addition, pursuant to the amendments, we have modified the manner in which such covenants are calculated (temporarily in certain cases and permanently in others) as well as the levels at which the net debt to capitalization covenant will be tested during the period commencing immediately following the end of the Waiver Period and continuing through the end of 2023,” RCCL said.

The amendments increase the monthly-tested minimum liquidity covenant to $500 million for the duration of the waiver period, subject to reduction to $350 million if RCCL raise at least $500 million of additional capital. “Pursuant to these amendments, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022,” the company said.

Photo: Silver Moon of Silversea Cruises. The company is part of RCCL