01—Abstract
Summary
Summary of the 10-Q filed October 29, 2021. Cited figures are marked; the original filing is the authoritative source.
In the third quarter of 2021, Royal Caribbean Cruises Ltd. (RCL) reported total revenues of $457.0 milliona, a significant increase from the $33.7 million in the same period of 2020, reflecting the gradual resumption of global cruise operations.
However, the company continued to experience substantial net losses, with a net loss attributable to Royal Caribbean Cruises Ltd. of $1.42 billionb for the quarter, or $5.59 per share. This was an improvement from the $1.35 billion loss in the prior year's third quarter, but still indicates ongoing financial challenges due to the lingering effects of the COVID-19 pandemic. Despite the ongoing losses, RCL demonstrated progress in its operational ramp-up, with 63% of its fleet back in service and over 500,000 passengers carried.
The company also focused on strengthening its liquidity position, ending the quarter with $3.3 billionc in cash and cash equivalents. Significant financing activities included extending debt maturities and issuing new debt, aiming to improve the balance sheet and reduce interest costs. The company anticipates continued gradual fleet ramp-up, with an expectation to operate approximately 80% of its fleet by year-end 2021.
02—Key points
Key Highlights
- Total revenues increased significantly to $457.0 million in Q3 2021 from $33.7 million in Q3 2020, driven by the resumption of cruise operations.
- The company reported a net loss attributable to Royal Caribbean Cruises Ltd. of $1.42 billion for Q3 2021, or $5.59 per share, indicating continued financial strain despite operational recovery.
- By the end of Q3 2021, 63% of RCL's fleet was operational, carrying over 500,000 passengers, demonstrating a phased return to service.
- Cash and cash equivalents stood at $3.3 billion as of September 30, 2021, providing a degree of liquidity amid the ongoing recovery.
- RCL actively managed its financial position through debt extensions and new financings, aiming to bolster liquidity and manage interest expenses.
- The company expects to operate approximately 80% of its fleet by the end of 2021, signaling continued operational recovery.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed October 29, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $456.96M-$33.69M | +1456.4% |
| Cost of Revenue | $813.69M$308.61M | +163.7% |
| Gross Profit | -$356.73M-$342.30M | −4.2% |
| SG&A Expenses | $323.42M$246.78M | +31.1% |
| Operating Income | -$1.01B-$996.11M | −1.0% |
| Interest Expense | $430.66M$259.35M | +66.1% |
| Net Income | -$1.42B-$1.35B | −5.8% |
| EPS (Basic) | $-5.59$-6.29 | +11.1% |
| EPS (Diluted) | $-5.59$-6.29 | +11.1% |
| Shares Outstanding (Basic) | 254.71M214.16M | +18.9% |
| Shares Outstanding (Diluted) | 254.71M214.16M | +18.9% |
05—Questions
Frequently Asked Questions
What was Royal Caribbean's financial performance in Q3 2021?
In the third quarter of 2021, Royal Caribbean reported a net loss attributable to the company of $1.42 billion, or $5.59 per share. Total revenues increased significantly to $457.0 million, up from $33.7 million in the same period of 2020, driven by the phased resumption of cruise operations.
How is the company managing its liquidity and debt?
Royal Caribbean ended Q3 2021 with $3.3 billion in cash and cash equivalents. The company has been active in managing its financial resources by extending debt maturities and undertaking new financing activities to strengthen its liquidity and manage interest costs. Covenants on major credit facilities were extended through at least Q3 2022.
What is the current status of the company's fleet operations?
As of the end of Q3 2021, Royal Caribbean had 38 of its 60-ship fleet operational, representing 63% of its capacity. The company anticipates operating approximately 80% of its fleet by the end of 2021, with a goal to return to historical load factors by the third quarter of 2022.
What is the outlook for future bookings and pricing?
Booking volumes improved in Q3 2021 compared to Q2 2021, with September showing strong performance for 2022 sailings. Full-year 2022 sailings are booked within historical ranges and at higher prices than 2019. Load factors for 2022 sailings are improving, with the second half of the year showing solid historical levels.
06—Continue