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RCCL reiterates full year guidance, forex and fuel negative impact raised sixfold

  • Written by Kari Reinikainen
  • Category: Top Headlines

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping company, reiterated its earlier view expects its full year adjusted EPS to be in the range of $8.70 to $8.90 per share. 

“This range includes a negative impact of $0.35 from currency (forex) and fuel versus our previous quarterly guidance and $0.06 in additional interest expense related to the purchase price for Silversea,” RCCL said in a statement. 

“Thus, excluding the impact of currency, fuel and additional interest related to the Silversea investment, the company is effectively raising its guidance by $0.40 per share,” RCCL said

It expects a Net yield increase in the range of 2.75% to 3.75% in constant currency. As reported yields are expected to be up 3.25% to 4.0%.

Net cruise costs, excluding fuel are expected to be up approximately 2.5% in constant currency - in line with previous guidance; and up approximately 3.0% as reported.

Taking into account current fuel pricing, interest and currency exchange rates, and the factors detailed above, the company estimates 2018 Adjusted EPS to be in the range of $8.70 to $8.90 per share.

The company said it does not forecast fuel prices and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on today's fuel prices, the company has included $184 million and $693 million of fuel expense in its third quarter and full year 2018 guidance, respectively.

"2018 is shaping up to be another year of record earnings, which is being driven by a strong demand environment and effective cost and capital management," said Jason T. Liberty, executive vice president and CFO. "While it is too early to guide on 2019, it is very encouraging to see these positive trends further supporting a strong book of business for next year."

RCCL exceeds second quarter guidance on strong performance of business

  • Written by Kari Reinikainen
  • Category: Top Headlines

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping company, has reported second quarter earnings per share (EPS) higher than its April guidance on strong performance of its business, but foreign exchange rates and fuel prices caused concerns.

Adjusted EPS rose to $2.17 from $1.71 in the same period last year and exceeded its own guidance $0.39. 

“Such a high level of favorability is unusual and was driven by a noteworthy confluence of factors including: better than expected revenue from the global brands, better performance from the joint ventures and lower than expected expenses which were driven by timing,” RCCL said in a statement.

Revenues rose to $2.34 billion from $2.20 billion in the second quarter year on, while operating profit increased to $456.9 million from $419.7 million. Net profit rose to $466.3 million from $369.5 million.

In the first six months of the year, revenues increased to $4.37 billion from $4.20 billion and operating profit rose to $731.0 million from $699.2 million. Net profit rose to $684.9 million from $584.3 million.

"While we are frustrated by foreign exchange and fuel rates, we are tickled pink that our business continues to excel and overcome these headwinds," said Richard D. Fain, chairman and CEO, in the statement.  "It is a pleasure to prove, once again, how strong our brands are and to demonstrate continued upside to our yields while maintaining strong expense control."

Gross yields rose up 2.7% in constant currency (up 3.7% as-reported). Net yields were up 2.8% in Constant-Currency (up 3.8% as-reported).

Gross Cruise Costs per Available Passenger Capacity Day (APCD) increased 1.1% in constant currency (up 1.8% As-Reported). Net Cruise Costs (NCC) excluding Fuel per APCD were up 1.1% in constant-currency (up 1.8% as-reported).

The company said it does not forecast fuel prices and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on today's fuel prices, the company has included $184 million and $693 million of fuel expense in its third quarter and full year 2018 guidance, respectively.

Forecasted consumption is 50% hedged via swaps for the remainder of 2018 and 52%, 41%, 20% and 5% hedged for 2019, 2020, 2021 and 2022, respectively. For the same five-year period, the average cost per metric ton of the hedge portfolio is approximately $443, $364, $380, $426 and $632, respectively.

 

 

Genting Hong Kong predicts smaller first half loss

  • Written by Kari Reinikainen
  • Category: Top Headlines

Genting Hong Kong, the parent company of Star Cruise, Dream Cruises and Crystal Cruises, said that it expects smaller first half loss than a year ago..

Based on the preliminary assessment of the latest unaudited financial information, excluding the share of results of Travellers, the Group is expected to record a consolidated net loss in the range of $150 million to $170 million for the six months ended 30 June 2018, the company said in a statement.

This compares with a consolidated net loss of $205.4 million, excluding the share of results of Travellers, for the six months ended 30 June 2017.

Such expected reduction in the consolidated net loss of the Group is mainly attributable to the improved performance of the cruise segment.

However, the improved performance of the cruise segment is partially offset by a lower cost capitalisation in the shipyards for the six months ended 30 June 2018 as the keel laying of the 20,000 gross ton Crystal Endeavor and the first 204,000 gross ton Global Class ships will be in August 2018 and September 2018 respectively, which will subsequently increase the rate of production and cost capitalisation.

 

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