Summary
Royal Caribbean Cruises Ltd. (RCL) experienced a profoundly challenging year in 2020 due to the COVID-19 pandemic, which led to a near-complete suspension of operations from March 2020 through at least April 2021. This resulted in a significant net loss attributable to the company of $(5.8) billion for the year, a stark contrast to the profitability of previous years. The company took aggressive actions to bolster liquidity, raising approximately $9.3 billion through debt and equity issuances, and drastically cutting operating and capital expenditures. Looking ahead, while the company has developed detailed health and safety protocols in line with CDC guidelines, the timing and specifics of a full operational restart remain uncertain.
Financial Highlights
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Financial Statements
Beta
| Revenue | $2.21B |
| Cost of Revenue | $2.77B |
| Gross Profit | -$556.30M |
| SG&A Expenses | $1.20B |
| Operating Income | -$4.60B |
| Interest Expense | $844.24M |
| Net Income | -$5.80B |
| EPS (Basic) | $-27.05 |
| EPS (Diluted) | $-27.05 |
| Shares Outstanding (Basic) | 214.34M |
| Shares Outstanding (Diluted) | 214.34M |
Key Highlights
- 1The company reported a substantial net loss of $(5.8) billion for the year ended December 31, 2020, primarily driven by the suspension of all cruise operations due to the COVID-19 pandemic.
- 2RCL raised approximately $9.3 billion in new capital through various financing activities (debt and equity offerings) to preserve liquidity and manage cash flow during the operational pause.
- 3Operating expenses were significantly reduced by approximately 80% of their steady-state monthly run rate, and capital expenditures were cut by $3.0 billion for 2020 and 2021.
- 4The company is implementing enhanced health and safety protocols, collaborating with experts and health authorities, to prepare for a phased return to service, guided by the CDC's Framework for Conditional Sailing Order.
- 5Despite the severe disruption, RCL has agreements in place to defer $1.5 billion in principal amortization payments and secured covenant waivers on over $11 billion in credit facilities through at least Q3 2022.
- 6The company sold three older, less efficient ships and announced the sale of the Azamara brand in January 2021 to streamline its fleet and cost structure.
- 7Bookings for the second half of 2021 and the first half of 2022 are showing strength and are at higher pricing than 2019 levels, indicating strong underlying demand for cruising.