Royal Caribbean Group has recorded its second consecutive quarter with a deficit of more than $1bn.
On Monday, the New York-listed owner of 62 ships posted a $1.64bn loss for the second quarter, compared with a $473m profit for the same period last year.
On an adjusted basis, it reported a $1.3bn loss versus a $533m profit a year ago, "as a result of the impact of the Covid-19 pandemic", it said. The company suspended operations in March because of the pandemic.
These adjusted results led to a $6.13 loss per share, missing analysts' prediction of a $4.81 loss per share, against last year's earnings per share of $2.54.
A net loss of $1.44bn — a $310m loss when adjusted — for the first quarter compared with a net profit of $250m and adjusted earnings of $276m for the same period last year.
These figures contributed to a half-year net loss of $3.08bn — adjusted to a $1.59bn loss — against a net profit of $723m and an adjusted positive result of $809m for the first half of 2019.
'Unprecedented challenges'
"The Covid-19 pandemic is posing an unprecedented challenge to our industry and society. Our teams are working tirelessly to return to service soonest and doing so by developing new health and safety protocols to protect the well-being of our guests, crew and destinations we visit," chief executive Richard Fain said in a statement.
"In the meantime, we are using this time to refine our operations to be as efficient as we can while providing the great experiences that so many people are eagerly awaiting."
As previously reported, Royal Caribbean plans to address Covid-19 through a "Healthy Sail Panel" orchestrated with Norwegian Cruise Line Holdings.
At the same time, it has joined Carnival Corp and Norwegian in pulling multiple financing levers to ride out the no-revenue pandemic, including issuing $2.15bn in notes.
It also has $11.3bn in credit facilities to pay for deliveries scheduled by 2025.
"We continue to take substantial actions to bolster our financial position," chief financial officer Jason Liberty said in a statement.
"We have accessed the capital market in an opportunistic manner and continue to aggressively manage our spend.
"We are prepared to navigate a volatile period while making decisions that position the company well for the recovery."
Burning cash
Royal Caribbean estimates its cash burn to range from $250m to $290m per month during the fleet lay-up.
Liquidity as of 30 June stood at about $4.1bn in cash and cash equivalents amid debt maturities of $300m for the rest of 2020 and $1.3bn for next year.
The company expects to spend $600m by December and $1.8bn in 2021 on newbuildings.
It plans to receive only three out of five newbuildings by 2021 as planned — two being the 596-berth Silver Moon and Silver Dawn.
TradeWinds has identified one of the two delayed newbuildings as the 6,360-berth Wonder of the Seas — its biggest ship yet, originally set for delivery next spring.
The delivery was pushed back by coronavirus-related delays at France's Chantiers de l'Atlantique, according to an announcement on its website.
Royal Caribbean's bookings for 2021 are "trending well and within historical ranges", with $1.8bn in customer deposits, but it is withholding 2020 financial outlook.
"The company cannot estimate the impact of Covid-19 on its business, financial condition or near or longer-term financial or operational results with reasonable certainty," it said.
"Notwithstanding the foregoing, the company expects to incur a net loss on both a US GAAP [generally accepted accounting principles] and adjusted basis for its third quarter and the 2020 fiscal year, the extent of which will depend on the timing and extent of the return to service."
