Cruise giant Royal Caribbean Group has returned to paying a dividend to shareholders, reaching another post-pandemic milestone as its profits continue to soar past expectations.
The New York-listed Miami operator said it will pay out $0.40 per share, more than four years after the Covid-19 pandemic ended dividends as it shut down the cruise sector.
It reported profits that were above analyst estimates and raised its full-year guidance.
“Our momentum continues!” chief executive Jason Liberty said in the earnings report.
The world’s second-largest owner and operator of cruise ships reported second-quarter net income of $854m, up from $459m a year earlier.
Both figures factor out non-controlling interest in jointly owned subsidiaries.
Royal Caribbean’s adjusted earnings per share (EPS) of $3.11 was well above the $2.75 average estimate of 16 analysts polled by Yahoo Finance.
The company now expects to deliver $11.35 to $11.45 in adjusted EPS for 2024, which is up from a guidance range of $10.70 to $10.90 in its previous quarterly report.
The new guidance is also above the average analyst expectation calling for $11.08 in adjusted EPS for the full year.
Royal Caribbean delivered $4.11bn in revenue during the quarter, up from $3.52bn a year earlier.
“Exceptional demand for our vacation experiences has accelerated our performance by generating significant yield growth over the past several years,” Liberty said.
The company had been targeting three financial goals that it called the Trifecta: at least $100 in adjusted Ebitda per available passenger cruise day; 13% or higher return on invested capital; and at least $10 in annual adjusted EPS.
And although Royal Caribbean was aiming to deliver the Trifecta by the end of 2025, it did so in the 12 months leading in the second quarter of this year.
“We met our financial targets 18 months earlier than expected, have our balance sheet in a strong position, reinstated our dividend and … we are just getting started,” Liberty said.
But it was another financial metric achieved in the quarter that allowed the company to pay a dividend.
Royal Caribbean repaid the debt payments that had been deferred on two credit facilities. Pushing back those payments had put restrictions on returning capital to shareholders, but that has now been lifted.
Chief financial officer Naftali Holtz said the company expects to make progress on achieving investment-grade financial metrics, bringing leverage below 3.5 times debt to equity.
“Our accelerated performance and commitment to strengthening the balance sheet have allowed us to reduce both leverage and cost of capital,” he said.
“Our strong balance sheet allows us to expand capital allocation and reinstate a quarterly dividend, further supporting our goal of creating long-term shareholder value.”
The quarterly results lifted first-half profit to $1.21bn, roughly three times the $411m earned in the opening six months of 2023.
