Royal Caribbean (RCI) reported a US GAAP net loss for the first quarter of 2021 of $1.1 bill or a negative $4.66 per share, compared to a net loss of $1.4 bill or a negative $6.91 per share in 1Q20.
RCI also reported an adjusted net loss of $1.1 bill or a negative $4.44 per share for 1Q21, compared to an adjusted net loss of $310.4 mill or $1.48 per share in the previous period.
Both 1Q21 losses were the result of the impact of the COVID-19 pandemic on the business.
The average monthly cash burn rate for 1Q21 was around $300 mill. This is slightly higher than the previously announced range and was due mainly to fleetwide restart expenses and timing.
Since the suspension of operations in March, 2020, the company has raised about $12.3 bill through a combination of bond issuances, common stock offerings and other loan facilities.
Given the current environment, the company said that it continued to bolster its liquidity. As of 31st March, 2021, RCI had liquidity of around $5.8 bill, including $5.1 bill in cash and cash equivalents and a $0.7 bill commitment for a 364-day facility.
As the company gears up for a return to operations, it said it expected to incur incremental spend in bringing the ships back to operational status, returning ships’ crew members and implementing enhanced health and safety protocols.
RCI explained that to return each vessel to service takes in many variables, including deployment opportunities, commercial potential, cost of operations and cash flow. Given the fluidity of return to service decisions and costs related to the ramp-up, the company cannot reasonably estimate a monthly average cash burn rate related to such ramp-up.
Monthly average cash burn rate for ships that are in lay-up status is expected to remain consistent with previous expectations.
“We are looking forward to resuming operations out of various ports around the world in the coming months. In addition, we have had very constructive dialogues with the Centres for Disease Control and Prevention (CDC) in recent weeks about resuming cruising in the US in a safe and healthy manner,” said Richard Fain, RCI Chairman and CEO (pictured).
“CDC has notified us of some clarifications and amplifications of their Conditional Sail Order (CSO), which addressed uncertainties and concerns we had raised. They have dealt with many of these items in a constructive manner that takes into account recent advances in vaccines and medical science.
“Although this is only part of a very complex process, it encourages us that we now see a pathway to a healthy and achievable return to service, hopefully in time for an Alaskan season,” he said.
“We are prepared and eager for the flywheel to start turning again,” added Jason Liberty, Executive Vice President and CFO. “Moreover, we are optimistic that with the gradual resumption of cruise operations, our cash flow from operations will sequentially improve, driven by an increase in the inflow of customer deposits.
“We feel optimistic about our future and are thrilled to see more and more guests around the globe enjoying incredible vacations on board our ships,” he said.
Booking activity for 2H21 was aligned with the company’s anticipated resumption of cruising. Pricing was higher than in 2019, both including and excluding the diluting impact of future cruise credits (FCCs).
Cumulative advance bookings for 1H22 are within historical ranges and at higher prices when compared to 2019. This was achieved with minimal sales and marketing spend, which the company believes highlights a strong long-term demand for cruising.
Since the last business update, about 75% of bookings for 2021 were new and 25% were due to the redemption of FCCs and the ‘Lift & Shift’ programme.