Royal Caribbean Cruises reported 2017 US GAAP and adjusted earnings of $7.53 per share — beating the its own double-double EPS target and the mid-point of previous guidance by $0.75 and $0.16, respectively.
In addition, the company announced that 2018 adjusted earnings are expected to be in the range of $8.55 to $8.75 per share, RCL announced in its fourth quarter and full year earnings statement.
US GAAP and adjusted net income were $1.63 bill or $7.53 per share for the year, compared with US GAAP net income of $1.28 bill, or $5.93 per share, and adjusted net income was $1.31 bill, or $6.08 per share, for 2016.
Gross Yields were up 5.7% on a constant-currency basis (up 5.9% as reported). Net Yields were up 6.4% on a constant-currency basis (up 6.5% as-reported).
Gross Cruise Costs per APCD increased 1.9% on a constant-currency and as-reported basis. Net cruise costs (NCC), excluding fuel per APCD, were up 2% on a constant-currency and as-reported basis.
For 2018, net yields are expected to increase 1.5% to 3.5% on a constant-currency basis (up 2.75% to 4.75% as reported).
NCC, excluding fuel per APCD, are expected to be up 1.5% to 2% on a constant-currency basis (up 2% to 2.5% as reported).
US GAAP and adjusted net income of $1.63 bill or $7.53 per share for last year, beat the January, 2017 mid-point guidance by $0.53 or $115 mill and equates to a 23.8% year-over-year growth in earnings per share.
This result was achieved despite an unusually ferocious hurricane season, which impacted earnings by around $55 mill or $0.26 per share.
“Our teams worked hard to achieve the double-double goals and now they have done it,” said Richard Fain, RCL chairman and CEO. “Each of the brands performed excellently during the past year raising their guest satisfaction and employee engagement scores to new heights. This augurs well as we focus on our previously announced 20/20 Vision.”
A combination of strong demand for North American and European products, as well as on board offerings, drove the impressive growth rate, the company claimed.
NCC, excluding fuel per APCD, were up 2% on a constant–currency basis mainly driven by investments in revenue generating activities, relief efforts due to the hurricanes and payroll related incentives.
“We started the year very well positioned to achieve our double-double goals, and 2017 ended up being exceptionally good, resulting in the company exceeding these goals,” said Jason Liberty, executive vice president and CFO. “Strong demand trends for cruising coupled with disciplined cost management helped deliver another record year for the company.”
US GAAP and adjusted net income for the fourth quarter of last year were $288 mill or $1.34 per share, compared to $261.1 mill or $1.21 per share and $264.7 mill, or $1.23 per share for 4Q16.
Gross Yields were up 4.1% on a constant-currency basis. Net Yields were up 3.9% on the same basis, beating the mid-point of the guidance by 165 basis points. Strong close-in demand for the core products, combined with better than expected on board spend, drove the increase.
Gross Cruise Costs per APCD increased 5.6% on a constant-currency basis. NCC, excluding fuel per APCD, were up 8.7% on a constant-currency basis.
RCL also announced that it will give a bonus to all of its 66,000 employees equal to 5% of their salary, excluding corporate officers. This bonus will take the form of equity grants vesting over three years, thus giving every employee a stake in the company’s future success.
The bonus totals about $80 mill and will also include major upgrading of crew facilities and recreation areas on board the ships.
“Our people are what make our business,” said Fain. “We wanted to show our appreciation in a tangible way and we wanted it to reach every employee regardless of level in the organisation. It was our way of saying thanks a million; in fact, thanks 80 million.”
The company’s booked position for 2018 is better than last year’s record high and at higher rates. North American and European consumers continue to drive strong demand for all of the main products. These trends, coupled with strong on board spend and a positive outlook for the Asia/Pacific products, are positioning the company for a ninth consecutive year of yield growth, RCL claimed.
“Our yields are increasing on top of an exceptional 6.4% net yield growth experienced in 2017,” said Liberty. “This is quite extraordinary and a testament to the strength in the demand for cruising and our brands.”