Royal Caribbean Reports Loss, Better than Expected Results

Royal Caribbean Cruises Ltd. reported its first quarter 2009 net loss was $36.2 million, or $0.17 per share, compared to net income of $75.6 million, or $0.35 per share in 2008. The company said the results were significantly better than prior guidance of a loss of between $0.30 and $0.35.

Net yields for the first quarter decreased 13.5 percent versus 2008, better than the company’s guidance of down 14 percent to 16 percent. Net Cruise Costs per APCD (NCC) declined 7 percent, better than guidance of down 4 percent to 6 percent.

NCC excluding bunker, declined 6.8 percent as compared to the first quarter of 2008 and versus guidance of a decrease of 5 percent to 7 percent. The improved cost control carries forward to provide expected full year NCC excluding bunker of down 6 percent to 8 percent.

For the year, the company is projecting revenue yields to be toward the lower end of its previous guidance, down 12 percent to 13 percent. Royal Caribbean said the slightly reduced revenue expectations are largely offset by the improved cost outlook and are expected to result in 2009 earnings per share of around $1.35.

As of March 31, the company had $1.1 billion in liquidity and expects to generate over $1 billion in operating cash flow in 2009. Royal Caribbean recently received commitments for financing of Royal Caribbean International’s Oasis of the Seas and signed credit agreements for Celebrity Equinox and Celebrity’s fourth Solstice-class vessel scheduled to enter service in 2011.

Royal Caribbean said revenues were $1.3 billion, versus $1.4 billion in the first quarter of 2008. Net yields decreased 13.5 percent from the prior year. The company said the overall revenue environment was slightly better than previous guidance due to stable close-in booking patterns.

Onboard net yield declined consistent with the company’s prior expectations. Fuel costs benefited from reductions in at-the-pump pricing and continued consumption reduction initiatives and were $10 million better than previous estimates. NCC declined 7 percent versus the first quarter of 2008 and excluding fuel declined 6.8 percent.

For the full year, Royal Caribbean expects net yields to decline 12-13 percent on an as-reported basis and 9-10 percent on a constant dollar basis. Net cruise costs are forecasted to decrease 10-12 percent for the year and 11-12 percent for the second quarter.