10-QPeriod: Q3 FY2021

ROYAL CARIBBEAN CRUISES LTD Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 29, 2021For Securities:RCL

Summary

In the third quarter of 2021, Royal Caribbean Cruises Ltd. (RCL) reported total revenues of $457.0 million, 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 billion 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 billion 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.

Financial Highlights

49 data points
Beta

Revenue

$456.96M

-78.1% Gross Margin

Net Income

-$1.42B

-311.7% Net Margin

EPS (Diluted)

$-5.59

Total Assets

$32.67B

Cash & Equivalents

$3.29B

Free Cash Flow

-$771.31M

Financial Statements
Beta
Revenue$456.96M
Cost of Revenue$813.69M
Gross Profit-$356.73M
SG&A Expenses$323.42M
Operating Income-$1.01B
Interest Expense$430.66M
Net Income-$1.42B
EPS (Basic)$-5.59
EPS (Diluted)$-5.59
Shares Outstanding (Basic)254.71M
Shares Outstanding (Diluted)254.71M

Key Highlights

  • 1Total revenues increased significantly to $457.0 million in Q3 2021 from $33.7 million in Q3 2020, driven by the resumption of cruise operations.
  • 2The 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.
  • 3By the end of Q3 2021, 63% of RCL's fleet was operational, carrying over 500,000 passengers, demonstrating a phased return to service.
  • 4Cash and cash equivalents stood at $3.3 billion as of September 30, 2021, providing a degree of liquidity amid the ongoing recovery.
  • 5RCL actively managed its financial position through debt extensions and new financings, aiming to bolster liquidity and manage interest expenses.
  • 6The company expects to operate approximately 80% of its fleet by the end of 2021, signaling continued operational recovery.

Frequently Asked Questions

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.

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.

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.

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.