Fourth quarter 2009 net income increased to $3.4 million, or $0.02 per share, compared to net income of $1.5 million, or $0.01 per share in 2008.
Royal Caribbean Cruises Ltd. (NYSE: RCL; Oslo) today announced earnings for the fourth quarter and full year of 2009 and provided guidance for 2010.
Key Highlights
• Fourth quarter 2009 net income increased to $3.4 million, or $0.02 per share, compared to net income of $1.5 million, or $0.01 per share in 2008. The results were better than the company's previous guidance of a loss of approximately ($0.05) per share due to stronger than expected revenues and continued good cost discipline.
• Net Yields for the fourth quarter decreased 7.2% as compared to 2008 and guidance of a 7% to 8% decline.
• Net Cruise Costs per APCD ("NCC") for the fourth quarter decreased 10.5% versus 2008. NCC excluding fuel for the fourth quarter declined 8.8% versus 2008.
• For the full year 2009, Net Yields declined 14.2%; NCC excluding fuel declined 7.0%; and earnings per share were $0.75.
• The company noted an improving booking environment and expects Net Yields for 2010 to improve 3% to 6% versus 2009. First quarter 2010 Net Yields are expected to improve approximately 2%.
• NCC excluding fuel are expected to be flat to slightly up for the full year of 2010 and up around 1% in the first quarter. After adjusting for changes in currency, NCC excluding fuel are forecasted to be flat to down slightly for the first quarter and the full year.
• EPS for the year (assuming current fuel prices) is expected to be in the range of $2.00 to $2.20 including $0.39 related to a legal settlement. The first quarter EPS is expected to be in the range of $0.25 to $0.30.
"Good cost discipline and better than expected revenues have enabled us to end 2009 on a decidedly upbeat note," said Richard D. Fain, chairman and chief executive officer. "We're happy to say goodbye to 2009 and pleased to embark on 2010 with an outlook of solid yield improvement, strong cost controls and improving returns to our shareholders." Fain continued, "We are also benefiting from the terrific success of our latest Oasis- and Solstice-class vessels. These ships are generating very healthy returns due to high guest satisfaction, excellent revenues and lower operating costs."
Fourth Quarter 2009 Results
Royal Caribbean Cruises Ltd. today announced net income for the fourth quarter 2009 of $3.4 million, or $0.02 per share, compared to net income of $1.5 million, or $0.01 per share, in 2008.
Revenues were unchanged year over year at $1.5 billion for the fourth quarter of both 2009 and 2008. Net Yields decreased 7.2% from the prior year or 9.7% after adjusting for year over year changes in currency. Net Yields were at the upper end of previous guidance due to strength in both ticket and onboard revenues.
NCC decreased 10.5% from the prior year or 12.4% after adjusting for changes in currency. NCC excluding fuel, declined 8.8% from the prior year or 11.2% after adjusting for changes in currency.
Fuel costs were $5.0 million higher than the company's previous calculations. Fourth quarter pricing averaged $500 per metric ton and consumption was 325.2 thousand metric tons.
Full Year 2009 Results
Net income for the full year 2009 was $162.4 million, or $0.75 per share, compared to net income of $573.7 million, or $2.68 per share, for the full year 2008. Revenues for the full year 2009 declined to $5.9 billion from revenues of $6.5 billion for the full year 2008. Fuel costs per metric ton decreased 18% to $486 for the full year and consumption was 1,235,000 metric tons. Fuel expenses for the year would have been higher if not for a 3.7% consumption improvement per APCD during 2009. Since 2005 the company has reduced energy consumption per APCD by 11%.
Revenue Environment
The company reported that early "wave season" bookings have been encouraging and that since the beginning of September, new bookings have been running approximately 30% higher than the corresponding period a year ago. Current price levels are also ahead of the same time last year across the majority of the company's product groups.
The company reported that booked load factors and average per diems are ahead of same time last year for all four quarters and the full year. The company expects net yields to increase approximately 2% for the first quarter and between 3% and 6% for the full year. After adjusting for changes in currency, Net Yields are forecasted to be around flat in the first quarter and increase 3% to 5% for the full year.
"Wave season is off to a promising start," said Brian J. Rice, executive vice president and chief financial officer. "It is still early in the selling cycle for 2010, but our order book is stronger and prices are higher than at this same time last year. We clearly are not at pre-recession demand levels, but we are pleased to see solid yield recovery underway."
Legal Settlement
In addition to the previously disclosed $0.30 per share legal settlement, a further $0.09 per share gain will be recognized related to the settlement in the first quarter. As a result, a total of $0.39 will be recorded as a one-time gain in other income/(expense) during the first quarter of 2010.
Expense Guidance
NCC are forecasted to be flat for the first quarter and flat to up slightly for the full year 2010. After adjusting for changes in currency, NCC are forecasted to decline approximately (1%) in the first quarter and be flat for the full year.
Excluding fuel, NCC are expected to increase approximately 1% for the first quarter and are expected to be flat to up slightly for the full year. After adjusting for changes in currency, NCC excluding fuel are forecasted to be flat to down slightly for the first quarter and the full year.
Fuel Expense
The company does not forecast fuel price changes and its cost calculations are based on current at-the-pump prices net of hedging impacts. Based on today's fuel prices the company has included $163 million and $687 million of fuel expense in its first quarter and full year 2010 guidance, respectively.
The company's fuel consumption is currently 58% hedged for the first quarter. In keeping with its previously disclosed hedging strategy, forecasted consumption is now 50% hedged in 2010, 50% hedged in 2011 and 15% hedged in 2012.
First Quarter 2010 Full Year 2010
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Fuel Consumption 320,000 mt 1,379,000 mt
Fuel Expenses $163 Million $687 Million
Percent Hedged (forward consumption) 58% 50%
Impact of 10% change in fuel prices $7 Million $34 Million
First Quarter 2010 Full Year 2010
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EPS $0.25 - $0.30 $2.00 - $2.20
Capacity 9.2% 11.4%
Net Yields Approx. 2% 3% to 6%
Net Cruise Costs per APCD Approx. Flat Flat to up slightly
Net Cruise Costs per APCD,
excluding Fuel Approx. 1% Flat to up slightly
Depreciation and
Amortization $155 to $160 Million $640 to $660 Million
Interest Expense $82 to $87 Million $330 to $350 Million
