Royal Caribbean is working to meet the CDC’s conditions for resuming the cruise, but ‘many uncertainties remain as to the specifications, timing and cost of implementing its requirements’. Here, a Royal Caribbean ship is docked in the port of Miami.
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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 against a profit of $ 1.42 per share the previous year, as revenue plunged from $ 2.5 billion to $ 34, 1 million.
Royal Caribbean (ticker: RCL), like its peers, suspended most of its operations for almost a year due to Covid. With most of its fleet idle, the company has burned hundreds of millions of money every month.
In a press release on Monday, the Miami-based company estimated its monthly cash consumption at $ 250 million to $ 290 million “during a prolonged suspension of operations”.
As of December 31, the company’s liquidity totaled about $ 4.4 billion. Last year, to bolster its liquidity, Royal Caribbean raised about $ 9.3 billion in new capital, including debt and equity.
Royal Caribbean did not provide financial guidance for the year, except that it expects to have losses on generally accepted accounting principles and on an adjusted basis for the first quarter and the full year of 2021. CFO Jason Liberty told analysts during the company’s fourth quarter the Profits say Monday morning that “the timing and trajectory of the recovery remain uncertain”.
Mid-morning, stock market trading, Royal Caribbean’s shares rose 10%, about $ 86.60.
Speaking to analysts, CEO Richard Fain said that 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’s vaccines have started to be distributed.
“We continue to work with the panel” and “to identify the safest path to take in the new post-vaccine environment, when we can protect our guests and crew like never before,” said Fain, adding that the company has successfully resumed some cruises. of Singapore.
An important question is when Royal Caribbean will be able to resume operations inside and outside 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 fulfill the structure” of that order.
“Although the structure represents an important step towards returning to service, many uncertainties remain regarding the specifications, time and cost of implementing its requirements,” said the statement.
Royal said she hopes to resume her global cruise operation “gradually, with initial cruises reducing guest occupancy, modified itineraries and improved health and safety protocols.”
Cruise operators suffered a setback recently when the Canadian government extended the ban on large cruise ships for another year. This will likely have an impact on Alaskan cruises, which are popular in the summer.
Royal Caribbean said in its press release on Monday that reservations for the second half of this year are “in line with the resumption of cruises planned by the company”.
On a GAAP basis, Royal Caribbean lost $ 6.09 per share in the fourth quarter, compared to a profit of $ 1.30 per share a year earlier.
Throughout 2020, the company lost $ 27.05 per share on a GAAP basis and $ 18.31 on an adjusted basis, reflecting the huge impact of closing operations due to the pandemic.
In 2019, before the pandemic hit, the company earned $ 8.95 on a GAAP basis and $ 9.54 on an adjusted basis.
Corrections and amplifications
Royal Caribbean raised about $ 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]