From there, the company expanded rapidly with the creation of Azamara Cruises in May 2007 as a subsidiary of Celebrity Cruises.
This near-term update doesnt impact our $80 fair value estimate or our long-term outlook, and we still think Royal can surpass 2019s level of revenue and passengers in 2023. "Last week, the CDC ended its COVID-19 Program for Cruise Ships. Celebrity Cruises is a cruise line headquartered in Miami, Florida[22] and a wholly owned subsidiary of Royal Caribbean Group. These products and services are usually sold through license agreements or subscriptions. Net interest expense for the third quarter of 2022, based on current interest rates, is expected to be in the range of $310 million - $320 million. EBITDA and Adjusted EBITDA were calculated as follows (in thousands): Impairment and credit losses (recoveries) (9). With the fleet back in service, we have the full strength of our platform as we continue to execute on our recovery and build on our capabilities for long-term success.". Bunker pricing, net of hedging, for the second quarter was $721 per metric ton and consumption was 382,000 metric tons. Third quarter load factors are expected to average approximately 95%, with itineraries in North America (including the Caribbean, Alaska, Bermuda, West Coast, and Canada) averaging about 100%. All rights reserved. (2)Primarily represents asset impairments in 2021 and a credit loss recovery for a note receivable in which credit losses were previously recorded in 2022. Second quarter load factors were 82%. In addition, many of these risks and uncertainties are currently heightened by and will continue to be heightened by, or in the future may be heightened by, the COVID-19 pandemic. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS, (unaudited, in thousands, except per share data), Marketing, selling and administrative expenses, Impairment and credit losses (recoveries), Interest expense, net of interest capitalized, (Loss) gain on cash flow derivative hedges, Trade and other receivables, net of allowances of $7,897 and $13,411 at June30, 2022 and December31, 2021, respectively, Other assets, net of allowances of $72,648 and $86,781 at June30, 2022 and December31, 2021, respectively, Current portion of operating lease liabilities, Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding), Common stock ($0.01 par value; 500,000,000 shares authorized; 283,076,357 and 282,703,246 shares issued, June30, 2022 and December31, 2021, respectively), Treasury stock (28,018,385 and 27,882,987 common shares at cost, June30, 2022 and December31, 2021, respectively), Total liabilities and shareholders' equity, Loss (gain) on derivative instruments not designated as hedges, Amortization of debt discounts and premiums. [7], A third brand under Royal Caribbean Cruises ownership was formed in 2000 when Island Cruises was created as a joint venture with First Choice Holidays. Coming Spring 2024, the Sixth Oasis Class Ship Will be the First of its Class Powered by LNG, Celebrity ushers in a new era of travel with Beyond, celebrating industrys first physical delivery ceremony since the pandemic. This call can be heard, either live or on a delayed basis, on the company's Investor Relations website at www.rclinvestor.com. 'COLOUR THE WORLD': SILVERSEA SEWS CULTURE, COLOR, AND TASTE INTO ITS LARGEST-EVER VOYAGE COLLECTION FOR 2024/2025 WITH HAUTE COUTURE CATWALK, ROYAL CARIBBEAN GROUP REPORTS SECOND QUARTER 2022 RESULTS, HIGHLIGHTED BY THE RETURN OF ITS FULL FLEET BACK TO SERVICE AND POSITIVE OPERATING CASH FLOW, Cautionary Statement Concerning Forward-Looking Statements. Pre-cruise onboard purchases continue to exceed prior years at higher prices, indicating quality and healthy future demand. In 2018, Royal Caribbean International controlled 19.2% of the worldwide cruise market by passengers and 14.0% by revenue. Founded in 1994 by the Vlasov Group of Monaco and the Lefebvre family of Rome it pioneered all-inclusive cruising with its first ship, Silver Cloud. These companies stand to benefit from pent-up demand--but they arent all undervalued today. [30], By December 2020, a reorganization plan had been developed, to restart some cruises, with financial assistance from Royal Caribbean. The company mainly marketed to Spanish passengers, although cruises were also sold by some travel operators outside the Spanish-speaking world. Adjusted measures have limitations in that they do not reflect all of the amounts associated with our results of operations as do the corresponding U.S. GAAP measures. We do not make predictions about future exchange rates and use current exchange rates for calculations of future periods. Words such as "anticipate," "believe," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "would," "considering," and similar expressions are intended to help identify forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Travel and European bank stocks continue to slip. We've cut our economic moat ratings on these notable names. It was also announced by the CEO of Royal Caribbean that Freeport Harbor will be developed into a cruise facility of choice. [27] Originally, most Pullmantur ships did not operate cruises for the company during the northern hemisphere winter season. Because European itineraries generate higher than average pricing, the lower load factors are expected to negatively impact the comparison of fleetwide revenue per passenger cruise day in the third quarter when compared to the third quarter of 2019. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis. [12] In October 2008, Royal Caribbean Cruises rationalized their holdings by selling their share of Island Cruises to TUI.[6]. A few undervalued stocks remain, but many have already surged past fair value. The Net Loss and Adjusted Net Loss for the quarter are primarily the result of the impact of the COVID-19 pandemic on the business. Gross Cruise Costs per APCD and NCCper APCD for the second quarter included $7.75 per APCD related to enhanced health protocols and one-time costs to return ships and crew back to operations. More information about factors that could affect our operating results is included under the caption "Risk Factors" in our most recent current report on Form 10-Q, as well as our other filings with the SEC, copies of which may be obtained by visiting our Investor Relations website at www.rclinvestor.com or the SEC's website at www.sec.gov. Booking volumes received in the second quarter for 2022 sailings averaged 30% above 2019 booking volumes for 2019 sailings in the corresponding period in the second quarter with even greater strength in July. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters. Although there has been plenty of economic rhetoric on a weakening consumer, travel companies appear to be dodging a pullback in discretionary spend, as evidenced in no-moat Royal Caribbeans demand outlook. Adjusted (Loss) Earnings per Share ("Adjusted EPS")Represents Adjusted Net (Loss) Income divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. [33][34], In February 2020 TUI announced the purchase of Hapag-Lloyd Kreuzfahrten. A keel-laying ceremony took place at Finnish shipyard Meyer Turku to celebrate the progress on the revolutionary cruise ship. We continue to see a robust and accelerating demand environment for cruising and on-board spend. Oil tops $116, Occidental and Kroger hit new highs. The Group continues to benefit from the delivery of new, more efficient ships and past sales of less efficient ships, as well as actions taken to improve operating costs and margins that continue to materialize as operations ramp up. Available Passenger Cruise Days ("APCD")APCD is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period, which excludes canceled cruise days and cabins not available for sale. The company does not forecast fuel rates, and fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Due to significant uncertainty, we are unable to predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive of our related hedging programs. In 2006, Pullmantur Cruises, through its parent company, was purchased by U.S.-based Royal Caribbean Group,[27] but Royal Caribbean later sold a 51% stake in the cruise line to Spain-based investment firm Springwater Capital, retaining a 49% stake. Changes in operating assets and liabilities: Increase in trade and other receivables, net, Increase in prepaid expenses and other assets, Decrease in accrued expenses and other liabilities, Cash received on settlement of derivative financial instruments, Cash paid on settlement of derivative financial instruments, Investments in and loans to unconsolidated affiliates, Cash received on loans to unconsolidated affiliates, Proceeds from the sale of property and equipment and other assets, Net cash provided by financing activities, Effect of exchange rate changes on cash and cash equivalents, Net (decrease) increase in cash and cash equivalents, Cash and cash equivalents at beginning of period, Cash and cash equivalents at end of period, Notes receivable issued upon sale of property and equipment and other assets, Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities. [6], Royal Caribbean Group was formed as Royal Caribbean Cruises Ltd. in 1997 when Royal Caribbean Cruise Line purchased Celebrity Cruises. These items are uncertain and could be material to our results of operations in accordance with U.S. GAAP. The presentation of adjusted financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Transaction costs related to Silversea Cruises acquisition included within marketing, selling and administrative expenses, Costs, net of insurance recoveries, related to the Oasis of the Seas incident included within cruise operating expenses. The company has scheduled a conference call at 10:00 a.m. Eastern Time today. More importantly, we think structural changes Royal made to costs during the pandemic will ultimately allow it to reach a 37% EBITDA margin, well above its prepandemic 31%. Royal Caribbean Group (NYSE: RCL) is one of the leading cruise companies in the world with a global fleet of 64 ships traveling to approximately 1,000 destinations around the world. Examples of these risks, uncertainties and other factors include, but are not limited to the following: the impact of the global incidence and spread of COVID-19, which has led to the temporary suspension of our operations and has had and will continue to have a material adverse impact on our business and results of operations, or other contagious illnesses on economic conditions and the travel industry in general and the financial position and operating results of our Company in particular, such as: the current and potential additional governmental and self-imposed travel restrictions, the current and potential extension of the suspension of cruises and new additional suspensions, guest cancellations; our ability to obtain sufficient financing, capital or revenues to satisfy liquidity needs, capital expenditures, debt repayments and other financing needs; the effectiveness of the actions we have taken to improve and address our liquidity needs; the impact of the economic and geopolitical environment on key aspects of our business, such as the demand for cruises, passenger spending, and operating costs; incidents or adverse publicity concerning our ships, port facilities, land destinations and/or passengers or the cruise vacation industry in general; concerns over safety, health and security of guests and crew; further impairments of our goodwill, long-lived assets, equity investments and notes receivable; an inability to source our crew or our provisions and supplies from certain places; the incurrence of COVID-19 and other contagious diseases on our ships and an increase in concern about the risk of illness on our ships or when traveling to or from our ships, all of which reduces demand; unavailability of ports of call; growing anti-tourism sentiments and environmental concerns; changes in US foreign travel policy; the uncertainties of conducting business internationally and expanding into new markets and new ventures; our ability to recruit, develop and retain high quality personnel; changes in operating and financing costs; our indebtedness, any additional indebtedness we may incur and restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; the impact of foreign currency exchange rates, interest rate and fuel price fluctuations; the settlement of conversions of our convertible notes, if any, in shares of our common stock or a combination of cash and shares of our common stock, which may result in substantial dilution for our existing shareholders; our expectation that we will not declare or pay dividends on our common stock for the near future; vacation industry competition and changes in industry capacity and overcapacity; the risks and costs associated with protecting our systems and maintaining integrity and security of our business information, as well as personal data of our guests, employees and others; the impact of new or changing legislation and regulations or governmental orders on our business; pending or threatened litigation, investigations and enforcement actions; the effects of weather, natural disasters and seasonality on our business; emergency ship repairs, including the related lost revenue; the impact of issues at shipyards, including ship delivery delays, ship cancellations or ship construction cost increases; shipyard unavailability; and the unavailability or cost of air service. Adjusted Net (Loss) IncomeAdjusted Net (Loss) Income represents Net (Loss) Income excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. (1)For the quarter and six months ended June 30, 2019, the amount does not include incremental fuel expenses incurred of $0.7 million related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas. We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis. Silver Endeavour is scheduled to begin service winter 2022, spending its inaugural season in Antarctica starting November 2022. The purchase price for the vessel was $275 million, significantly below its estimated original cost. Provide specific products and services to you, such as portfolio management or data aggregation. We plan to wait for more clarity on the persistence of the coronavirus before further altering our forward estimates. It was formed in 2007 as a joint venture between the German tourism company TUI AG and the American cruise line operator Royal Caribbean Cruises Ltd., both of whom hold a 50% stake in the company. In July, the Group acquired an ultra-luxury expedition cruise ship that was originally delivered in 2021. As of June 30, 2022, the Group's customer deposit balance was $4.2 billion, a record high for the company. [8], In November 2006, Royal Caribbean Cruises purchased Pullmantur Cruises based in Madrid, Spain. [35], Holistica was formed in early 2019 after the purchase of the Grand Lucayan Resort in a joint venture by Royal Caribbean and ITM Group. The Group expects to operate approximately 11.6 million APCDs for the third quarter and 11.5 million APCDs for the fourth quarter. "Our liquidity position remains strong as we execute on our return to service, and our operations generate positive cash flow again," said Naftali Holtz, chief financial officer, Royal Caribbean Group. Shares of Carnival, Royal and Norwegian are undervalued and could remain depressed until the coronavirus passes. Based on this change, we are continuing to adapt our protocols to align more closely with how the rest of society and other travel and leisure businesses are operating. We provide a platform for our authors to report on investments fairly, accurately, and from the investors point of view. For the 2022 and 2019 periods presented, Net Cruise Costs and Net Cruise Costs excluding Fuel exclude (i) restructuring charges and other initiative expenses; (ii) the transaction costs related to the Silversea Cruises acquisition; and (iii) the costs, net of insurance recoveries, related to the Grand Bahama drydock structure incident involving Oasis of the Seas. As expected, load factors for sailings in the second half of 2022 remain below historical levels and are expected to finish at approximately 95% in the third quarter and reach triple digits by the end of the year. Additionally, Royal offered third-quarter guidance that included sales that reach $2.9 billion-$3 billion (around our $3.1 billion projection), signaling sales are set to surpass 2019 levels. Based in Miami, Florida, United States, it is the largest cruise line by revenue and second largest by passengers counts. The scheduled debt maturities for the remainder of 2022 are $1.6 billion. Starting Aug. 8, testing will be required for unvaccinated guests on all voyages and for vaccinated guests only on voyages that are six nights or longer. Forward-looking statements reflect managements current expectations, are based on judgments, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. The onboard product, including food, entertainment and amenities, is custom-tailored for German tastes and German is the main language used onboard its ships. [26] It began operations in the late 1990s as an offshoot of the Madrid-based travel agency Pullmantur. [27], On 22 June 2020, due to the economic impact caused by the COVID-19 pandemic, Pullmantur's owners announced they had filed for reorganization of Pullmantur under Spanish insolvency laws. Royal Caribbean Group, formerly known as Royal Caribbean Cruises Ltd., is a global cruise holding company incorporated in Liberia and based in Miami, Florida, US. It should be emphasized that the use of Constant-Currency is primarily used by us for comparing short-term changes and/or projections. Royal Caribbean International (RCI), also formerly known as Royal Caribbean Cruise Line (RCCL), is a cruise line brand founded in 1968 in Norway and organised as a wholly owned subsidiary of Royal Caribbean Group since 1997. Privacy Policy and We also respect individual opinionsthey represent the unvarnished thinking of our people and exacting analysis of our research processes. For 2023, all quarters are currently booked within historical ranges at record pricing. Learn more at www.royalcaribbeangroup.com or www.rclinvestor.com. We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis. Unlock Our Full Analysis With Morningstar Investor. Adjusted Net Loss and Adjusted Loss per Share were calculated as follows (in thousands, except per share data): Impairment and credit losses (recoveries) (2), Restructuring charges and other initiatives expense, Amortization of Silversea Cruises intangible assets related to Silversea Cruises acquisition, Convertible debt amortization of debt discount (3), Net gain related to the sale of the Azamara brand, Weighted-Average Shares Outstanding - Diluted. [31] Since mid July 2021 it was in process of liquidation. Develop and improve features of our offerings. The third-quarter EPS goal of $0.05-$0.25 marks the first quarter of profitability since prior to the pandemic but was lower than the above $1 we forecast as inflation continues to eats into profit potential. Royal Caribbean Group reports second quarter 2022 results, highlighted by the return of its full fleet back to service and positive operating cash flow, Ethisphere Announces Royal Caribbean Group as one of the 2022 Worlds Most Ethical Companies for the Seventh Time, Royal Caribbean Group appoints Governor Michael O. Leavitt to Board of Director, Royal Caribbean Groups Blue Green Promise. For the remainder of 2022 and all of 2023, the annual average cost per metric ton of the fuel swap portfolio is approximately $473 and $575, respectively. Approximately 20% of the customer deposit balance as of the end of the second quarter is related to FCCs. Read our editorial policy to learn more about our process. In the second quarter, approximately 90% of total bookings were new versus FCC redemptions.
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