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Sep 30, 2020
Royal Caribbean Q3 2020 Earnings Report
Royal Caribbean Group reported a net loss for Q3 2020 due to the COVID-19 pandemic, but is taking actions to improve liquidity and planning a phased resumption of cruises.
Key Takeaways
Royal Caribbean Group reported a US GAAP Net Loss of $(1.3) billion for the third quarter of 2020, compared to a Net Income of $883.2 million in the prior year. The company is focusing on enhancing liquidity and plans to resume cruise operations in a phased manner, starting with cruises from Singapore in December 2020.
Reported US GAAP Net Loss of $(1.3) billion, or $(6.29) per share, for Q3 2020.
Adjusted Net Loss of $(1.2) billion, or $(5.62) per share, for Q3 2020.
Estimates cash burn to be approximately $250 million to $290 million per month during suspension of operations.
Liquidity of approximately $3.7 billion as of September 30, 2020, including $3.0 billion in cash and cash equivalents.
Revenue by Segment
Forward Guidance
The Company’s operation is still subject to the impact of COVID-19. Consequently, the Company cannot estimate its near or longer-term financial or operational results with reasonable certainty. The Company expects to incur a net loss on both a US GAAP and adjusted basis for its fourth quarter and the 2020 fiscal year, the extent of which will depend on the timing and extent of the return to service.
Positive Outlook
- Booking activity for the first half of 2021 is aligned with the Company’s anticipated staggered resumption of cruises.
- The cumulative booked position for sailings in the second half of 2021 is within historical ranges.
- Prices are down slightly year-over-year when including the negative yield impact of bookings made with future cruise credits (“FCCs”) and about flat when excluding them.
- More than 65% of the 2021 bookings are new.
- Guests booked on cancelled sailings have the option to request a refund, to receive an FCC, or to “lift and shift” their booking to the following year.
Challenges Ahead
- Operation is still subject to the impact of COVID-19.
- The Company cannot estimate its near or longer-term financial or operational results with reasonable certainty.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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