Royal Caribbean swings to $1.4B first-quarter coronavirus loss
Booking prices for 2021 are similar to last year's, cruise operator says
Cruise lines are waiting on the CDC to lift the ‘no sail order’ and are putting in new safety measures for when their ships have passengers again. FOX Business’ Lauren Simonetti with more.
Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.
Royal Caribbean Cruises Ltd. swung to a loss for the first three months of the year as its sailings remain suspended amid the Covid-19 pandemic, drying up its revenue stream.
The cruise operator, which said it also expects to post a loss for the second quarter and the full year, on Wednesday reported net loss of $1.44 billion, or $6.91 a share, compared with a profit of $249.7 million, or $1.19 a share, in the comparable quarter last year. The company said it booked a non-cash impairment loss of $1.1 billion.
Adjusted losses were $1.48 a share, wider than the loss of 34 cents a share analysts polled by FactSet had expected. It canceled 130 sailings during the quarter.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RCL | ROYAL CARIBBEAN GROUP | 234.27 | -3.03 | -1.28% |
Revenue fell to $2.03 billion from $2.44 billion in the year-ago period. Analysts were looking for $2.06 billion. Cruise operating expenses rose to $1.51 billion from $1.41 billion.
FOR BEACH TOWNS, CORONAVIRUS MEANS A MAKE OR BREAK SUMMER STARTS NOW
Bookings are significantly lower than the same time last year, with prices down low-single digits, the company said. Those for 2021 are still similar to last year's, with prices up mid-single digits compared with 2020, Royal Caribbean said.
iStock
Royal Caribbean said about 45% of guests booked on canceled sailings have requested cash refunds as of April 30. Like other cruise lines, the company also offers future cruise credits at a premium as an alternative to cash refunds. As of March 31, the company said it had $2.4 billion in customer deposits, and that it continues to take future bookings through 2022.
CRUISE LINE BEGINS RECORD-BREAKING ROLLER COASTER TEST AMID CORONAVIRUS
Its ships have transitioned into various levels of layup, including maintaining a skeleton crew on board for general maintenance when most of the ship's systems are shut down. Those recurring maintenance costs have led to its cash burn of about $250 million to $275 million a month, the company said.
The company said it had about $2.3 billion in cash and cash equivalents as of April 30. To boost its liquidity, the company said it has upped its financing by about $4 billion through a secured bond issuance and increased revolver capacity. On Tuesday, it closed $3.32 billion in debt offering secured by 28 vessels and intellectual property. Royal Caribbean is also planning to cut $3 billion from 2020 capital expenditures.
CARNIVAL ANNOUNCES CORONAVIRUS LAYOFFS, FURLOUGHS, SALARY REDUCTIONS
As of Tuesday, Royal Caribbean said expected debt maturities for the remainder of 2020 and 2021 are $400 million and $900 million, respectively.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The company said it expects interest expense for the remainder of the year to be between $590 million and $610 million.
CLICK HERE TO READ MORE ON FOX BUSINESS
To cut costs, Royal Caribbean has laid off more than 5,000 U.S. shoreside employees, or about 26% of its workforce, frozen hiring and cut crew payroll, food, fuel, insurance and port charges. It has also eliminated or reduced marketing and selling expenses for the rest of the year.