Royal Caribbean is working to meet the CDC’s conditions for resuming the voyage, but ‘there are still many uncertainties regarding the details, timing and cost of implementing the requirements.’ Here, a Royal Caribbean ship is moored in the Port of Miami.
Daniel Slim / AFP via Getty Images
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Hit by the pandemic,
Royal Caribbean Group
lost $ 1.1 billion, or $ 5.02 per share, on an adjusted basis in the fourth quarter compared to a profit of $ 1.42 a share earlier, as revenue drops to $ 34.1 million from $ 2.5 billion.
Royal Caribbean (ticker: RCL), like its peers, has suspended most of its operations for almost a year due to Covid. With most of its fleet idle, the company burns hundreds of millions of cash every month.
In a press release Monday, the company estimates in Miami that its monthly cash burn is from $ 250 million to $ 290 million “during a prolonged cessation of operations.”
As of December 31, the company’s liquidity was approximately $ 4.4 billion. Last year, Royal Caribbean included about $ 9.3 billion in new capital, including debt and equity, to increase its liquidity.
Royal Caribbean has not provided financial guidelines for the year, except that it expects to have losses according to generally accepted accounting principles and adjusted basis for the first quarter and full year of 2021. earnings said Monday morning that “the timing and trajectory of the recovery remain uncertain.”
In the morning trading, Royal Caribbean shares rose 10%, to about $ 86.60.
Richard Fain, chief executive, told analysts much has happened since a Covid protocol panel sponsored by Royal Caribbean and
Norwegian Cruise Line Holdings
(NCLH) announced their recommendations last year. Since then, Covid vaccines have started rolling out.
“We continue to work with the panel” and “to identify the safest way forward in the new environment after vaccination when we can protect our guests and crew like never before,” Fain said. of Singapore.
An important question is when Royal Caribbean will be able to resume operations in and outside US ports. The Centers for Disease Control and Prevention issued a conditional sail order at the end of October, but the timing remains uncertain.
The company said it was “continuing to develop and develop its plan to meet the framework”.
“Although the framework is an important step towards returning to service, there are still many uncertainties about the details, timing and cost of implementing the requirements,” the statement said.
Royal said it plans to resume its global cruise operation “in a phased manner as the initial voyages had fewer visitors, changed the itinerary and improved health and safety protocols.”
The cruise operators recently had a setback when the Canadian government extended its ban on large cruise ships by another year. This is likely to have an impact on Alaska cruises, which are popular in the summer.
Royal Caribbean said in its press release on Monday that discussions for the second half of this year “coincide with the expected resumption of the company’s pace.”
On a GAAP basis, Royal Caribbean lost $ 6.09 per share in the fourth quarter, compared to earnings of $ 1.30 per share a year earlier.
For the whole of 2020, the company lost $ 27.05 per share on a GAAP basis and $ 18.31 on an adjusted basis, reflecting the large impact of the stagnant operations due to the pandemic.
In 2019, before the pandemic, the company earned $ 8.95 on a GAAP basis and $ 9.54 on a custom basis.
Corrections and reinforcements
Royal Caribbean raised about $ 9.3 billion in new capital last year. In a previous version of this article, the billion was omitted incorrectly.
Write to Lawrence C. Strauss by [email protected]