RCCL forecasts 2020 adjusted EPS to climb to $10.40-$10.70 range

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 04 February 2020 04 February 2020

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, says the outlook for the demand environment in the new year remains strong, but certain recent events have clouded the outlook somewhat.

“Excluding any impact from the Coronavirus and taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company estimates 2020 Adjusted EPS (earnings per share) will be in the range of $10.40 to $10.70 per share,” RCCL said in a statement, adding that its guidance does not include possible effect of Coronavirus outbreak.The 2019 EPS non-GAAP EPS amounted to $9.54

The company said it is very encouraged about the demand environment for 2020.  “Wave Season has started on a strong note with overall rates higher than same time last year and booked load factors ahead of same time last year on a like-for-like basis.  The company's new ships and new attractions are a major driver not only of revenue, but of the strength of its brands.”

Although demand for the core products is very strong across all quarters, recent geopolitical events such as the brushfires in Australia and unrest in the Middle East have impacted demand for certain itineraries, but the strength of the core products has more than compensated for this. The US and European markets have started the year on a particularly strong note.

The company expects a Net Yield increase in the range of 2.25% to 4.25% in constant currency and 2.5% to 4.5% as reported for the full year.

RCCL said four ships due to be introduced during 2020 will be important contributors to the yield growth and profitability.  The timing of the new ship deliveries would result in a more significant yield growth in the second half of the year than in the first half.

"Our yield outlook for 2020 is very encouraging with higher pricing on top of an exceptional 2019 performance," said Jason T. Liberty, executive vice president and CFO. 

"It's clear that the Coronavirus will impact revenue in China in the short term, but we are a long-term business and our plans to continue growing this profitable market remain unchanged.   We are also very excited about the introduction of our 20>25 by 2025 goals,” he continued.

“Our formula for success is simple and our path towards our EPS goal is driven by moderately growing our yields, effectively managing our costs and moderately growing our business.  Meanwhile, our emissions target, which is one of our many sustainability initiatives, will further focus our world-class design, engineering and operations teams to meaningfully improve our environmental impact."

Net cruise costs excluding Fuel are expected to be up 1.75% to 2.25 % in both Constant-Currency and As-Reported basis.  Operating costs for the full year show continued good discipline, although the cadence of costs between quarters will vary.  Costs in the first half of the year are expected to be higher than the second half driven by more drydock days and the timing of ship deliveries.

As previously announced, the Wuhan Coronavirus and the efforts to contain it are expected to negatively affect our results. While we expect this to be temporary, the situation is highly fluid and the overall impact cannot reasonably be estimated at this time.

Accordingly, our guidance does not include any provision for the impact of the outbreak. We will update our guidance as the situation stabilizes and we can reasonably estimate its impact.

Net yields are expected to increase 2.25% to 4.25% in constant currency and 2.5% to 4.5% as reported, RCCL said.

RCCL reports record result for 2019, but final quarter weaker year-on

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 04 February 2020 04 February 2020

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, has reported record results for 2019 despite a weaker final quarter than in the previous year.

For the full year, net income rose to $1.90 billion from $1.18 billion and operating income reached $2.08 billion compared to $1.89 billion. Revenues rose to $10.95 billion from $9.49 billion.

Earnings per share in GAAP terms rose to $8.95 from $8.56.

However, in the final quarter, net income fell to $280.7 million from $320.4 million in the same period in 2018, while operating income contracted to $299.4 million from $364.0 million. Revenues increased to $2.52 billion from $2.33 billion.

Gross yields were up 8.2% in constant-currency and 7.0% as reported.  Net Yields were up 8.0% and 6.7%, respectively.

Gross cruise costs per Available Passenger Cruise Days ("APCD") increased 8.7% in constant currency and by 8.0% as-reported.  Net cruise costs ("NCC") excluding Fuel per APCD increased by 11.4% in constant currency and by 10.8% as reported,’ the company said in a statement.