8-K

ROYAL CARIBBEAN CRUISES LTD 8-K Report (Jul 28, 2003)

Filed July 28, 2003For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) reported its second quarter 2003 results, with net income of $55.7 million, or $0.28 per diluted share, a decrease from $66.7 million, or $0.34 per diluted share, in the prior year's second quarter. Despite the dip in net income, revenues saw a notable increase of 10.2% to $905.8 million, driven primarily by a 15.5% expansion in capacity. However, this growth was tempered by a 4.6% decline in gross yields, attributed to lower ticket prices and occupancy, though offset by stronger onboard revenues. The company noted a positive trend with strengthening bookings and pricing levels post-war, exceeding their earlier expectations. While visibility remains limited for forecasting, RCL anticipates full-year net yields to be down approximately 1% to 2% year-over-year, with the third quarter projected for a 2% to 4% decline and the fourth quarter expected to be flat to slightly down. The addition of the new ship, 'Serenade of the Seas,' to its fleet is expected to contribute to future growth.

Key Highlights

  • 1Second quarter 2003 net income was $55.7 million ($0.28 per diluted share), down from $66.7 million ($0.34 per diluted share) in Q2 2002.
  • 2Second quarter 2003 revenues increased 10.2% to $905.8 million, driven by a 15.5% increase in capacity.
  • 3Gross yields declined 4.6% in Q2 2003 due to lower ticket prices and occupancy, partially offset by higher onboard revenues.
  • 4Net yields, however, were better than guided, decreasing 4.8% compared to the company's forecast of a 6%-9% decline.
  • 5Bookings and pricing levels have strengthened since the last update, indicating a positive post-war recovery trend.
  • 6RCL is adding the new 'Serenade of the Seas' to its fleet, the third Radiance-class ship.
  • 7The company secured an additional $50 million in commitments under its unsecured revolving credit facility, increasing availability to $550 million.

Frequently Asked Questions

For the second quarter of 2003, Royal Caribbean reported net income of $55.7 million, or $0.28 per diluted share, on revenues of $905.8 million. This represents a decrease in net income compared to the $66.7 million, or $0.34 per diluted share, reported in the second quarter of 2002, but an increase in revenue of 10.2%.

The revenue increase was primarily driven by a 15.5% rise in capacity. However, profitability was impacted by a 4.6% decline in gross yields, which was caused by lower cruise ticket prices and occupancy levels. This was partially offset by an increase in onboard revenues.

Royal Caribbean anticipates that net yields for the full year 2003 will be down approximately 1% to 2% compared to the prior year. Net yields in the third quarter are expected to decline by 2% to 4%, while the fourth quarter is projected to be roughly flat to slightly down.

Yes, during July 2003, the company received an additional $50 million in commitments under its unsecured revolving credit facility, increasing the total availability under the facility to $550 million.