Summary
Royal Caribbean Cruises Ltd. (RCL) reported first-quarter 2012 results that showed a significant year-over-year decline in net income, falling to $47.0 million ($0.21 diluted EPS) from $78.4 million ($0.36 diluted EPS) in the prior year period. This decline was primarily driven by a substantial increase in cruise operating expenses, particularly fuel costs, which surged by 30.0% per metric ton. Total revenues saw a healthy 9.7% increase to $1.8 billion, fueled by higher ticket prices and a 2.5% capacity increase, though partially offset by unfavorable foreign currency exchange rates. The company also noted the ongoing impact of the Costa Concordia incident, which is expected to negatively affect results in the second and third quarters of 2012, despite strong bookings for the fourth quarter of 2012 and 2013. Despite the decrease in net income, RCL's financial position remains solid with a total debt-to-capital ratio of 49.8% and a net debt-to-capital ratio of 49.0% as of March 31, 2012. The company continues to invest in future growth, exercising its option for a second "Project Sunshine" ship due in 2015. Liquidity appears adequate, with $277.5 million in cash and cash equivalents and $805.0 million available under revolving credit facilities.
Financial Highlights
48 data points| Revenue | $1.83B |
| Cost of Revenue | $1.26B |
| Gross Profit | $579.37M |
| SG&A Expenses | $264.60M |
| Operating Income | $135.38M |
| Interest Expense | $92.67M |
| Net Income | $46.96M |
| EPS (Basic) | $0.22 |
| EPS (Diluted) | $0.21 |
| Shares Outstanding (Basic) | 217.58M |
| Shares Outstanding (Diluted) | 219.23M |
Key Highlights
- 1Net income decreased to $47.0 million ($0.21 diluted EPS) in Q1 2012 from $78.4 million ($0.36 diluted EPS) in Q1 2011.
- 2Total revenues increased by 9.7% to $1.8 billion, driven by higher ticket prices and a 2.5% capacity increase.
- 3Cruise operating expenses rose significantly by 14.0% to $1.3 billion, largely due to a 30.0% increase in fuel costs per metric ton and higher food and commission expenses.
- 4The company exercised an option for a second 'Project Sunshine' ship, scheduled for delivery in Q2 2015, indicating continued investment in fleet expansion.
- 5Net Yields increased by 6.4% due to higher ticket prices and strategic distribution changes, while Net Cruise Costs per APCD increased by 12.8%.
- 6The Costa Concordia incident is noted as having a negative short-term impact on 2012 results, particularly in Q2 and Q3.
- 7Liquidity remains strong with $277.5 million in cash and cash equivalents and $805.0 million available under credit facilities.