Cruise giant Royal Caribbean
International has announced improved earnings for the second quarter of 2010.
Net income was $60.5 million, or 28
cents per share, compared to a net loss of $35.1 million (16 cents) per share
in the second quarter of 2009. There was a revenue increase to $1.6 billion
compared to $1.3 billion at the same time last year. This was a result of
capacity increases and yield improvements, said analysts. Net yields increased
by 4.9 per cent, despite the impact of a stronger US dollar.
Net cruise costs for the second
quarter declined by 2.8 per cent with net costs excluding fuel decreasing by
4.4 per cent. Excluding currency impacts, said the company, this would have
corresponded to decreases of 2 per cent and 3.4 per cent. Increased efficiency
of fuel consumption was reported with 318,000 metric tons noted. Fuel expenditures
were $6 million better than had been previously calculated.
Richard Fain, chairman and chief
executive officer, said it was gratifying to post a solid quarter’s results
that showed yield improvement and strong cost control.
“What a difference a year makes.
Despite ongoing uncertainty with the economy, our profitability continues to
improve and our booking environment continues to be remarkably stable. We
remain focused on strengthening our financial position and I am encouraged
about the tremendous global response to our brands.”
Cruising into the future
Going forward, Royal Caribbean
International said that booked load factors and average per diems continued to
improve compared to 2009. The company anticipated that the third quarter would
see net yields improve by 4 per cent on an as-reported basis. The full year of
2010 is expected to improve by 4 to 5 per cent. Cruise costs are forecast to be
down 1 per cent for the third quarter and 1 per cent for the full year.
Liquidity of the company was
reported as $1 billion, including cash and the undrawn portion of the company’s
unsecured revolving credit facility, in addition to the commitments the company
has on three remaining new-build ships. Projected capital expenditures for the
next three years, based on its current ship orders, are $2.2 billion this year
and $1 billion both for 2011 and 2012. This translates to a capacity increase
of 11.5 per cent in 2010, 7.1 per cent next year and 2 per cent in 2012.
Executive vice president and chief
financial officer, Brian Rice, said that demand for cruises remained on track
with the company’s predictions.