Royal Caribbean Cruises Ltd · Q1 2020 earnings

Briefing

Royal Caribbean Group faced significant challenges due to the COVID-19 pandemic, resulting in a net loss for the first quarter of 2020. The company suspended its global cruise operation in March, leading to cancelled sailings and reduced capacity.

Royal Caribbean Cruises Ltd. reported a US GAAP Net Loss of $(1.4) billion for the first quarter of 2020, compared to a Net Income of $249.7 million in the prior year. The results were significantly impacted by the COVID-19 pandemic, which led to the suspension of global cruise operations and a non-cash asset impairment loss of $1.1 billion. The company has taken actions to enhance liquidity and reduce operating expenses in response to the crisis.

• Suspended global cruise operation starting March 13, 2020, due to the COVID-19 pandemic, resulting in the cancellation of 130 sailings.
• Reported a US GAAP Net Loss of $(1.4) billion, or $(6.91) per share, compared to a Net Income of $249.7 million, or $1.19 per share, in the prior year, including a non-cash asset impairment loss of $1.1 billion.
• Implemented programs to offer future cruise credits in lieu of cash refunds for cancelled sailings, with approximately 45% of guests requesting cash refunds as of April 30, 2020.
• Enhanced liquidity by approximately $4.0 billion through a secured bond issuance and increased revolver capacity, and reduced 2020 capital expenditures by $3.0 billion.

Headline financials

Revenue & EPS history

The company expects to incur a net loss on both a US GAAP and adjusted basis for its second quarter and the 2020 fiscal year; the extent of which will depend on the timing and extent of our return to service.