ROYAL CARIBBEAN CRUISES LTD Quarterly Report for Q2 Ended Jun 30, 2019

Summary

For the second quarter of 2019, Royal Caribbean Cruises Ltd. (RCL) reported robust top-line growth, with total revenues increasing by 20.1% year-over-year to $2.8 billion. This growth was driven by an 11.0% increase in capacity, largely due to the addition of new ships and the full integration of Silversea Cruises, coupled with a significant rise in ticket prices and onboard spending. Net income attributable to Royal Caribbean Cruises Ltd. saw a modest increase of 1.4% to $472.8 million, resulting in diluted earnings per share of $2.25, up from $2.19 in the prior year period. The company demonstrated effective cost management, with Net Cruise Costs per APCD increasing by 6.1% (8.2% on a constant currency basis), indicating a strong ability to translate revenue growth into profitability.

Key Highlights

• 1Total revenues increased by 20.1% to $2.8 billion for the second quarter of 2019 compared to the prior year period.
• 2Net income attributable to Royal Caribbean Cruises Ltd. rose by 1.4% to $472.8 million, with diluted EPS reaching $2.25.
• 3Capacity increased by 11.0% driven by new ship additions (Spectrum of the Seas, Celebrity Edge, etc.) and the integration of Silversea Cruises.
• 4Net Yields increased by 8.1%, reflecting higher ticket prices and onboard spending per passenger.
• 5Gross Cruise Costs increased by 19.2%, largely in line with capacity expansion and operational costs associated with new ships and acquisitions.
• 6The company maintained strong liquidity, with $2.1 billion in available liquidity as of June 30, 2019, consisting of cash and cash equivalents and undrawn credit facilities.
• 7Significant future capital commitments exist, with 13 ships on order totaling approximately $10.3 billion, indicating continued investment in fleet expansion.

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