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Royal Caribbean significantly raises guidance for 2023 EPS

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 04 May 2023 04 May 2023

Royal Caribbean Group said that as a result of a record-breaking WAVE season and accelerating demand for its cruise experiences, the company is increasing its 2023 Adjusted Earnings per Share (EPS) guidance to $4.40 – $4.80.

This compares with an earlier guidance of $3.00 to $3.60, published in the winter when the company released its 2022 result statement.

Full Year 2023 Outlook:

Net Yields are expected to increase 6.25% to 7.25% as-reported and 6.75% to 7.75% in Constant-Currency, compared to 2019.
NCC, excluding Fuel, per APCD is expected to increase 5.2% to 6.2% as-reported and 5.5% to 6.5% in Constant Currency, compared to 2019.
The company expects to significantly exceed prior record Adjusted EBITDA, achieved in 2019.
Adjusted Earnings per Share for the full year are expected to be in the range of $4.40 to $4.80 per share.

Second Quarter 2023 Outlook:

Net Yields are expected to increase 9.6% to 10.1% as-reported and 10.1% to 10.6% in Constant-Currency, compared to the second quarter of 2019.
NCC, excluding Fuel, per APCD is expected to increase approximately 8.6% as-reported and approximately 8.9% in Constant Currency, compared to second quarter 2019.
Adjusted Earnings per Share for the second quarter are expected to be in the range of $1.50 to $1.60 per share.

Update on Bookings

Booking volumes in the first quarter were significantly higher than the corresponding period in 2019 and were considerably better than expected. This year, WAVE started earlier and extended further, generating a record level of bookings. These strong booking trends resulted in an acceleration of the company’s booked position in relation to prior years. In addition, the company is generating significantly more bookings at meaningfully higher prices than in prior years, particularly from the North American consumer.

The remarkable WAVE booking period resulted in strong close-in demand at higher prices for the first quarter, and enabled a significant improvement in revenue expectations for all three remaining quarters. The increase in yield expectations for the year is predominantly related to higher load factors in the first quarter and higher prices for all four quarters, especially for Caribbean sailings. Consumer spending onboard, as well as pre-cruise purchases, continue to exceed 2019 levels driven by greater participation at higher prices. The company expects load factors to reach historical levels by late spring.

As of March 31, 2023, the Group's customer deposit balance was at a record $5.3 billion.

Fuel Expense

Bunker pricing net of hedging for the first quarter was $733 per metric ton and consumption was 411,000 metric tons.

The company 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 $276 million of fuel expense in its second quarter guidance at a forecasted consumption of 409,000 which is 55% hedged via swaps.

Forecasted consumption is 54% hedged via swaps for the remainder of 2023, 25% and 5% hedged for 2024 and 2025, respectively. The annual average cost per metric ton of the hedge portfolio is approximately $577, $664, and $753 for 2023, 2024, and 2025, respectively.

The higher average cost in 2024 is driven primarily by the hedged fuel mix with Marine Gas Oil ("MGO") consumption hedged higher than Intermediate Fuel Oil ("IFO") consumption. The higher average cost in 2025 is driven by only MGO consumption hedged that year.

RCCL cuts net loss and reports $271 million operating profit in first quarter

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 04 May 2023 04 May 2023

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, has reported a sharp reduction in net loss and a substantial operating profit for the first quarter.

Net loss narrowed to $49.7 million from $859.2 million in the first quarter of 2022, while the Miami based company reported an operating profit of $47.9 million for the first three months of this year compared to a loss of $1,167.1 million a year earlier.

These results were significantly better than the company's guidance primarily due to strong close-in bookings at higher prices, continued strength of onboard spend, and favorable timing of operating costs.

"We knew that demand for our business was strong and strengthening, but we have been pleasantly surprised with how swiftly demand further accelerated well above historical trends and at higher rates," said Jason T. Liberty, president and chief executive officer of Royal Caribbean Group, in a statement. "Leisure travel continues to strengthen as consumer spend further shifts towards experiences. Demand for our brands is outpacing broader travel due to a strong rebound and an attractive value proposition," added Liberty. "We are increasing full year guidance, given the significant momentum in our business, and we are well on our way to achieve our Trifecta goals.”

Key Highlights

Stronger than anticipated demand has led to a record-breaking and extended WAVE season, which has and continues to translate into a robust booking environment – driving higher load factors and higher prices. These factors, combined with the continued strength in onboard spending, have led to the significant improvement (versus guidance) in the first quarter and the significant increase in the company's full-year expectations for ticket and onboard revenue, as well as earnings.

First Quarter 2023:

Load factors in the first quarter were 102%.
Gross Margin Yields were down 12.4% as-reported and 10.5% in Constant-Currency. Net Yields were up 5.1% as-reported and 5.8% in Constant-Currency, compared to the first quarter of 2019.
Gross Cruise Costs per Available Passenger Cruise Days ("APCD") increased 8.2% as-reported and 8.8% in Constant-Currency, compared to the first quarter of 2019. Net Cruise Costs ("NCC"), excluding Fuel, per APCD increased 5.2% as-reported and 5.8% in Constant Currency, compared to the first quarter of 2019. Part of the improvement, compared to expectations, was due to favourable timing of operating costs.

First quarter revenue significantly exceeded the company's guidance primarily due to very strong close-in demand, higher load factors at higher prices, and continued strength in onboard revenue. The company experienced particularly strong close-in demand for Caribbean itineraries, which accounted for close to 80% of first quarter capacity.

Gross Cruise Costs per APCD increased 8.2% as-reported and 8.8% in Constant-Currency, compared to 2019. NCC excluding Fuel per APCD increased 5.2% as-reported and 5.8% in Constant-Currency, compared to 2019. Part of the improvement, compared to expectations, was due to favorable timing of operating costs. Gross Cruise Costs per APCD and NCC, excluding Fuel, per APCD for the first quarter included $2.87 per APCD of lingering transitional costs and structural costs (e.g. full-year operations of Perfect Day at CocoCay and the new Galveston terminal). In the first quarter, the company continued to benefit from multiple actions taken over the past several years to reshape its cost structure which is helping to offset persistent inflation.

"First quarter results reflect continued strong demand for cruising and our teams' focus on delivering the best vacation experiences that exceed guest expectations," said Naftali Holtz, chief financial officer, Royal Caribbean Group. "We also benefited from favorable timing of operating expenses, as well as our continued focus on improving margins consistent with our Trifecta goals."

Contemporary market brands “highest returning” at Carnival group

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 04 May 2023 04 May 2023

Three contemporary market brands of Carnival Corporation & plc, the world’s largest cruise shipping group, generate the highest returns among its nine brands, said Josh Weinstein, President & CEO and Chief Climate Officer.

“An importantly, our growth is weighted towards three of our highest returning brands: Carnival Cruise Line, AIDA and P&O Cruises UK, following our portfolio and fleet optimisation,” he said at a conference call on 27 March.

Carnival Cruise Line is mainly focused on the US, while AIDA Cruises targets the German speaking part of Europe and P&O Cruises UK caters for the British market.

Viking doubles capacity for second season in North America's Great Lakes

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 03 May 2023 03 May 2023

Viking today is celebrating the start of its second season in the Great Lakes, as the new purpose-built Viking Polaris arrived in Toronto for her first port of call in the region. The Viking Polaris joins her identical sister ship, the Viking Octantis, which began sailing in the Great Lakes for the 2022 season and returned to the region in April 2023. With two 378-guest expedition vessels now in the region, Viking has doubled its capacity in the Great Lakes for 2023. The ships will remain in the Great Lakes through September 2023, sailing all five lakes and a variety of itineraries that operate between Toronto and Duluth.

“We are proud to welcome both of our expedition ships to the Great Lakes. With historic canals that are engineering marvels, cities with thriving arts and culture and unmatched wilderness, this is a phenomenal region of North America that may be familiar to many – but few have had the opportunity to explore,” said Torstein Hagen, Chairman of Viking. “After our first full season of Great Lakes voyages in 2022, we are grateful for the warm welcome we received from each destination and look forward to introducing even more curious travelers to the region this season and in the years to come.”

Designed specifically to reach the Great Lakes, Viking’s expedition fleet brings the newest and most modern vessels ever to explore this region of North America, as well as a significant commitment to local tourism and economic development for the states of Michigan, Minnesota, Wisconsin, and the Canadian province of Ontario. Beginning this season, Viking will also call on the new port of Cleveland, Ohio, during the new 15-day itinerary, Great Lakes Collection.

To further develop the scientific enrichment program for its Great Lakes voyages, Viking has partnered with the National Oceanic and Atmospheric Administration (NOAA) Great Lakes Environmental Research Laboratory (GLERL), which conducts innovative research on the dynamic environments and ecosystems of the Great Lakes and coastal regions to provide information for resource use and management decisions that lead to safe and sustainable ecosystems, ecosystem services, and human communities. Viking’s expedition ships have also been designated official NOAA / U.S. National Weather Service weather balloon stations, from which regular launches are undertaken.

Cunard and Fincantieri celebrate Queen Anne milestone

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 03 May 2023 03 May 2023

Today, the world's most iconic luxury cruise brand celebrated a momentous construction milestone with the float out of their fourth ship

The 249th ship to sail under the Cunard flag, Queen Anne officially touched water for the first time exactly 365 days before she will set sail on her maiden voyage to Lisbon on 3 May 2024.

Steeped in tradition, the float out is marked by a special ceremony where a ‘Madrina’ is named to offer blessings and best wishes for the ship, celebrating the flow of water into the ship's dry dock.

Carnival UK President, Sture Myrmell, said: “We are delighted to celebrate this important milestone in the construction of Queen Anne. The float out ceremony marks the ship’s transition from her building dock to where she truly belongs – in the water. Today marks a significant moment for Queen Anne as we recognize the dedication by the master ship builders at Fincantieri to build a ship that reinforces our position as a world-famous luxury brand.”

Luigi Matarazzo, General Manager Merchant Ships Division of Fincantieri, stated: “Queen Anne is the third ship we have the pleasure to build for Cunard, a pillar in the history of British seafaring, with whom we share a real commitment to excellence. Building a liner for this shipowner takes us back to our roots yet, at the same time, spurs us forward to the future in a spirit of determination to bring together tradition and innovation and further strengthen our longstanding relationship”.

The float out, completes the first comprehensive phase of construction for Queen Anne, which now transitions to focus on building the luxury ship's interiors.

Queen Anne

The design concepts for Cunard’s newest ship have been founded on heritage, craftmanship, style, storytelling, and innovation, and the 113,000 gross ton, 3,000-guest Queen Anne, which spans 14 decks, will offer travelers several breath-taking moments, including the largest curated art collection at sea.

For more than 180 years, Cunard has constantly refined the definitive experience of ocean travel, and Queen Anne will be bursting with Cunard’s signature experiences, including world-class dining, exceptional entertainment, and luxurious accommodation.

Entering service in May 2024, Queen Anne will make up a remarkable quartet for Cunard alongside Queen Mary 2, Queen Victoria, and Queen Elizabeth. It will be the first time since 1999 that Cunard will have four ships in simultaneous service.

The float out ceremony follows September’s iconic keel laying, in which a coin was embedded into the ship’s keel by Captain Inger Thorhauge, alongside an original coin from the ship’s namesake’s reign, to mark the formal start of her construction.