Royal Caribbean provides coronavirus update, sets 2020 guidance
'Our plans to continue growing this profitable market remain unchanged'
Royal Caribbean Cruises Ltd. said the ongoing coronavirus outbreak would affect its revenue in China for the short term, with modified itineraries expected to weigh 25 cents a share on its results.
"But we are a long-term business, and our plans to continue growing this profitable market remain unchanged," Finance Chief Jason Liberty said in prepared remarks Tuesday.
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Excluding effects of the coronavirus and current fuel pricing, interest rates and currency-exchange rates, the company expects earnings of $10.40 a share to $10.70 a share for 2020.
The Miami-based cruise operator said it has canceled eight cruises out of China ending March 4 and modified certain itineraries in the region.
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The company said it will deny boarding to individuals who have traveled from, to or through mainland China or Hong Kong in the past 15 days, and they will receive full refunds.
Royal Caribbean ship Allure of the Seas docked in San Juan, Puerto Rico, in March 2019.
People who have been in contact with individuals who have traveled from, to or through mainland China or Hong Kong in the past 15 days would receive mandatory health screenings, Royal Caribbean said, adding that all holders of China or Hong Kong passports would receive screenings.
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Those who report feeling unwell or demonstrate flu-like symptoms would be screened as well, the company said.
Declining consumer confidence in China could weigh on load factor and rate until the market normalizes, Royal Caribbean said. Extended travel restrictions and concerns over the outbreak could hurt the company's financial performance, it added.
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For 2020, the company expects net yields of 2.5 percent to 4.5 percent, or 2.25 percent to 4.25 percent in constant currency. It sees net yields being down 0.5 percent to 1 percent for the first quarter, or down about 0.5 percent in constant currency.
The company also introduced a set of goals in its 20>25 by 2025 program. Having $20 a share in adjusted earnings and reducing carbon footprint by 25 percent by 2025 are among the company's goals.
Shares of Royal Caribbean rose 2.2 percent in premarket trading.