Royal Caribbean Sees Loss In Q2, FY20 - Quick Facts

(RTTNews) - While reporting its first-quarter financial results on Wednesday, Royal Caribbean Cruises Ltd. (RCL) also provided a business update in light of the impact of the COVID-19 pandemic.

As part of the global containment effort for the COVID-19 pandemic, the company previously announced a voluntary suspension of its global cruise operations.

On March 10, 2020, Royal Caribbean had withdrawn its first quarter and full-year 2020 guidance. The company noted that as the magnitude, duration and speed of COVID-19 remains uncertain, it cannot estimate the impact of COVID-19 on its business, financial condition or near or longer-term financial or operational results with reasonable certainty.

However, the company expects to incur a net loss on both a U.S. GAAP and adjusted basis for its second quarter and the 2020 fiscal year, the extent of which will depend on the timing and extent of the company's return to service.

Royal Caribbean noted that due to the impact of COVID-19, booking volumes for the remainder of 2020 are meaningfully lower than the same time last year at prices that are down low-single digits.

Although still early in the booking cycle, the company said that the booked position for 2021 is within historical ranges when compared to same time last year, with 2021 prices up mid-single digits compared to 2020.

Royal Caribbean has implemented various programs in order to best serve its booked guests, providing the choice of future cruise credits in lieu of providing cash refunds for both cancelled sailings and future bookings.

As of April 30, 2020, about 45 percent of the guests booked on cancelled sailings have requested cash refunds. Additionally, as of March 31, 2020, the company had $2.4 billion in customer deposits.

Royal Caribbean said it continues to take future bookings for 2020, 2021 and 2022, and receive new customer deposits and final payments on these bookings.