10-QPeriod: Q1 FY2022

ROYAL CARIBBEAN CRUISES LTD Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 5, 2022For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) reported a net loss of $1.17 billion for the first quarter of 2022, a slight increase from the $1.13 billion net loss in the same period of 2021. Total revenues significantly increased to $1.06 billion from $42 million, driven by the company's continued return to operations, with nearly 90% of its fleet back in service. Despite the revenue growth, operating expenses also rose substantially due to the ramp-up of operations, increased marketing efforts, and inflationary pressures on fuel and food costs. The company's liquidity remains a key focus, with $3.8 billion in available liquidity as of March 31, 2022. RCL has taken steps to manage its debt maturities, including issuing new notes and securing backstop financing for potential future refinancing. While the company anticipates a return to profitability in the second half of 2022, ongoing uncertainties related to COVID-19, geopolitical events, and inflationary pressures pose material risks to its business, financial position, and results of operations.

Financial Highlights

46 data points
Beta

Revenue

$1.06B

-11.9% Gross Margin

Net Income

-$1.17B

-110.2% Net Margin

EPS (Diluted)

$-4.58

Total Assets

$32.94B

Cash & Equivalents

$1.97B

Free Cash Flow

-$1.89B

Financial Statements
Beta
Revenue$1.06B
Cost of Revenue$1.18B
Gross Profit-$125.71M
SG&A Expenses$394.03M
Operating Income-$859.21M
Interest Expense$277.66M
Net Income-$1.17B
EPS (Basic)$-4.58
EPS (Diluted)$-4.58
Shares Outstanding (Basic)254.82M
Shares Outstanding (Diluted)254.82M

Key Highlights

  • 1Total revenues surged to $1.06 billion in Q1 2022, up from $42 million in Q1 2021, reflecting the significant ramp-up in cruise operations.
  • 2Despite revenue growth, the company reported a net loss of $1.17 billion for Q1 2022.
  • 3Approximately 90% of RCL's global capacity was back in service as of March 31, 2022.
  • 4Operating expenses increased significantly, driven by the return to service, increased marketing, and rising fuel and food costs.
  • 5The company maintained $3.8 billion in liquidity as of March 31, 2022.
  • 6Significant debt maturities are scheduled for 2022 ($2.2 billion) and 2023 ($5.7 billion), with refinancing plans in place.
  • 7Bookings in Q1 2022 showed improvement, surpassing 2019 levels, though European bookings softened due to the war in Ukraine.

Frequently Asked Questions

In the first quarter of 2022, Royal Caribbean Cruises Ltd. reported total revenues of $1.06 billion, a substantial increase from $42 million in the same period of 2021. However, the company still incurred a net loss of $1.17 billion, compared to a net loss of $1.13 billion in Q1 2021. Operating expenses also rose significantly due to the resumption of operations and inflationary pressures.

As of March 31, 2022, RCL had $3.8 billion in liquidity, comprising $2.0 billion in cash and cash equivalents, $1.1 billion in undrawn revolving credit capacity, and a $0.7 billion commitment for a term loan facility. The company believes this liquidity is sufficient to fund its obligations for at least the next twelve months.

RCL faces ongoing risks and uncertainties, primarily related to the continuing effects of the COVID-19 pandemic, geopolitical events (such as the war in Ukraine), inflationary pressures on fuel and food costs, and supply chain challenges. These factors materially impact its business, liquidity, financial position, and results of operations. The company also has significant debt obligations and upcoming maturities that require careful management.

RCL expects to incur a net loss for the second quarter of 2022 but anticipates a return to profitability for the second half of 2022. This outlook is supported by improving booking trends and the continued ramp-up of its fleet operations.