Royal Caribbean reports ‘better than expected’ third quarter results

Royal Caribbean Group says the company’s third quarter results were “better than expected” as it noted “accelerated” booking volumes for the past three months.

As of September 30, the group’s customer deposit balance was $3.8 billion, with booking volumes “significantly higher” than sales over the same period in 2019.

In the third quarter, around 95% of total bookings were new rather than made using Future Cruise Credit, the firm said.

More: Entire Royal Caribbean Group fleet resumes operations

The cruising giant reported a net income of $33 million in the quarter, compared with a net loss of $1.4 billion in the same period in 2021.

Its liquidity position was $3.1bn on September 30, 2022, which includes cash and cash equivalents, undrawn credit and a $700m commitment for a 364-day loan from Morgan Stanley.

Load factors were 96% with Caribbean sailings reaching nearly 105%, said the company, which operates Royal Caribbean International, Celebrity Cruises and Silversea Cruises and is a 50% owner of a joint venture that operates Tui Cruises and Hapag-Lloyd Cruises.

Passengers continue to make bookings close to departure dates, meaning around 50% more bookings were for same-year sailings in the past quarter, when compared to the same three-month period in 2019.

Royal Caribbean Group president Jason Liberty said: “Last quarter’s better than expected performance was a result of the continued robust demand environment and strong execution by our teams.”

He added that the combination of brand positioning, the “most innovative fleet in the industry” and “nimble global sourcing” meant the company was well positioned to “to deliver record yields” next year.

However, cruise costs per average passenger cruise day (APCD) increased by 1% over the quarter, versus the second three-month period of 2022.

The company has launched a programme designed to increase earnings before interest, taxes, depreciation and amortisation (EBITDA) per APCD to triple digit figures, increasing earnings per share to double digits and achieving return on investment capital in the teens by the end of 2025.

Royal reported earnings per share of $0.13 and adjusted earnings per share of $0.26 in the third quarter.

The company expects fourth quarter load factors to be “similar” to the third quarter and to reach triple digits by the end of the year.

In the fourth quarter, the company expects to operate 11.7 million APCDs and generate approximately $2.6bn in revenue, based on current currency exchange rates.

More:  Record year for cruise sector in 2023 projected by Royal Caribbean Group