Royal Caribbean’s Fain still confident of return to positive trajectory

Written by Nick Blenkey
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Richard D. Fain, Chairman and CEO, Royal Caribbean Group: “We can’t wait to get back to the business of showing people the world and making great memories.” [Image: Royal Caribbean video]

Royal Caribbean Group (NYSE: RCL) today reported financial results for the fiscal year of 2020 that included a U.S. GAAP net loss of $5.8 billion compared to net income of $1.9 billion the prior year and an adjusted net loss of $3.9 billion or ($18.31) per share for full year 2020 compared to adjusted net income of $2.0 billion in the prior year.

U.S. GAAP net loss for the fourth quarter was $1.4 billion or $6.09 per share and adjusted net loss was $1.1 billion or $5.02 per share. In the same quarter last year, U.S. GAAP net income was $273.1 million or $1.30 per share, and adjusted net income was $297.4 million or $1.42 per share for the fourth quarter.

“The COVID-19 pandemic is having a painful and profound impact on our world and our business; unquestionably, this crisis is the most difficult in the company’s history,” said Richard Fain, chairman and CEO. “But we have been impressed and grateful for the resourcefulness and agility of our team in responding to these unprecedented challenges. More importantly, we remain confident about the ability of our company to recover and return to the positive trajectory we were on previously. We are encouraged to see the sharp decline in cases and the growing availability of vaccines. We can’t wait to get back to the business of showing people the world and making great memories.”

“These results reflect the staggering impact that the pandemic brought to our company and the whole industry during 2020,” said Jason Liberty, executive vice president and CFO. “I want to thank all our teams who have risen to the occasion, managing through the toughest year in Royal Caribbean’s history.”


The company has already begun some limited operations. In December, Quantum of the Seas started operating out of Singapore. In addition, its TUI Cruises affiliate has had three vessels operating in the Canary Islands since November.

Royal Caribbean says it is also continuing to prepare and develop its plan to meet the Framework for Conditional Sailing Order issued by the U.S. Centers for Disease Control and Prevention (CDC) for U.S. sailings.

While the framework represents an important step to return to service, says the company, “many uncertainties remain as to the specifics, timing, and cost of implementing its requirements.”

The company estimates its cash burn to be, on average, in the range of approximately $250 million to $290 million per month during a prolonged suspension of operations.

This range includes all interest expenses, ongoing ship operating expenses, administrative expenses, hedging costs, expected necessary capital expenditures (net of committed financings in the case of newbuilds) and excludes changes in customer deposits, commissions, principal repayments, and fees and collateral postings related to financing and hedging activities.

As the company starts returning its fleet into service, it says it has (with respect to existing operations), and will, incur incremental spend as it brings the ships out of their various levels of layup, returns the crew to the vessels, takes the necessary steps to ensure compliance with the recommended protocols and gears up its sales and marketing activities.


As of December 31, 2020, the company had liquidity of approximately $4.4 billion, including $3.7 billion in cash and cash equivalents and a $0.7 billion commitment from a 364-day facility.

The average monthly cash burn rate for the fourth quarter of 2020 was consistent with the previously announced range.

“We remain focused on improving our liquidity position, managing our operating expenditures and ensuring that our family of brands is ready for the return to service,” noted Liberty.


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