Royal Caribbean reports $1.6B loss amid pandemic

Royal Caribbean Group reported a $1.6 billion net loss for the second quarter of 2020 as coronavirus continues to keep the cruise industry shut down.

The parent company of Royal Caribbean International, Celebrity Cruises, Azamara and Silverseas Cruises reported the financial blow in its quarterly report Monday morning. In comparison, the company logged net income of $472.8 million for the same quarter in 2019, a more than $2 billion swing.

“The COVID-19 pandemic is posing an unprecedented challenge to our industry and society,” said Royal Caribbean Group Chairman and CEO Richard Fain in a press release. “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.

The earnings report shows the Miami-based company lost $7.83 on a per share basis. Its stock on Friday closed at $52.10, which represents a steady climb back from its low in March of $19.25 per share. It was trading over $135 a share in January before the pandemic.

The company statement projected similar results in the third quarter and projects monthly cash burn in the range of $250 million to $290 million.

“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,” Fain said.

It has procured more than $2 billion in guaranteed or convertible loans since its first-quarter report, which also saw a $1.4 billion loss. As of June 30, the company has liquidity of $4.1 billion to ensure it can last the coronavirus shutdwn. It has also deferred payment on debt on several loans through 2021. Interest on loans due in 2020 it expect won’t surpass $0.3 billion, and will be around $1.3 billion in 2021.

The statement also said two of its five planned ships under construction will be delayed until after December 2021.

The cruise industry came to a halt in March as COVID-19 spread, with member lines of Cruise Lines International Association agreeing to a cessation of sailing, that remains in effect after two extensions now so that no one will sail from the U.S. until at least November.

All cruises remain under a no-sail order through Sept. 30 from the Centers for Disease Control and Prevention as well.

Royal Caribbean Group has teamed up with Norwegian Cruise Line Holdings to form a task force to hash out its return-to-sail plans amid COVID-19.

The “Healthy Sail Panel” aims to get cruise industry standards in line for a safe return to sailing despite the threat of coronavirus. The co-chairs of the new panel are former Utah Gov. Mike Leavitt, who served as administrator of the EPA and Secretary of U.S. Department Health and Human Services under President George W. Bush, and Dr. Scott Gottlieb, commissioner of the U.S. Food and Drug Administration from 2017-19.

Any line that plans on sailing again from U.S. ports will need to have their plans approved by the CDC.

The company has a major footprint in Florida sailing most of its fleet from PortMiami, Port Everglades and Port Canaveral for a good part of the year, including home porting the world’s four largest ships.

RICHARD TRIBOU/ORLANDO SENTINEL Royal Caribbean Perfect Day at CocoCay welcomed its first ship on May 4, 2019, as Navigator of the Seas let loose about 3,500 guests to the island with much of its $250 million in upgrades in place, including a 13-slide water park, zip line and helium balloon.