Royal Caribbean Group Update from 8-K 10/13/20

[NavArch64]

quote from 8-K ... It is uncertain as to whether we will need to suspend additional sailings and to what extent, although once such suspension ends, we still do not expect to return to normal sailings for some time. The suspension of sailings and the expected reduction in demand for future cruising once we resume sailing has led to a significant decline in our revenues and cash inflows, which has required us to take cost and capital expenditure containment actions. Consequently, we have reduced and furloughed our workforce, with approximately 23% of our U.S. shoreside employee base being impacted and, except for the minimum safe manning shipboard crew required to operate the ships during the suspension of operations, our shipboard crew were notified that their contracts would end early and they would be notified about new assignments when operations resume in the future. As a result of these actions, we may be challenged in rebuilding our workforce which could further delay our return to service. In addition, we have reduced our planned capital spending through 2021, which may negatively impact our execution of planned growth strategies, particularly as it relates to investments in our ships, technology, and our expansion of land-based developments. Furthermore, we have taken actions to monitor and mitigate changes in our supply chain, and port destination availability, which may strain relationships with our vendors and port partners. We have not been notified by the CDC of any intention to extend the current “no sail” order beyond the current specified outside date of October 31, 2020, and we currently have no further information as to when the CDC will respond to our recommendations or make any announcement. Such responses will determine the timing and implementation of our plans to return to service which we expect to be gradual, and, with certain limited exceptions, including those described above, to include commercial sailings commencing no earlier than December 1, 2020. Based on the status of our discussions with the CDC and all recent communications with respect to our submitted plan, including consideration of the “no sail” order, as well as the best information available to us as of the date of this Current Report on Form 8-K, we remain optimistic that we will be able to commence commercial sailings in 2020; however, we can provide no assurance that we will be able to return to service within such timeframe. Any protocols we adopt in line with these recommendations may be costly to implement across our fleet and they may be less effective than we expect in reducing the risk of infection and spread of COVID-19 on our cruise ships, which will negatively impact our operations and expose us to reputational and legal risks. Due to the unprecedented and uncertain nature of the COVID-19 pandemic, it is difficult to predict the impact of further disruptions and their magnitude. The impact of further disruptions may depend on how they coincide with the timing of when we seek to resume sailing. In addition, we have never previously experienced a complete cessation of our cruising operations, and as a consequence, our ability to predict the impact of such a cessation on our brands and future prospects is limited and such impact is uncertain.

 

 

[Milwaukee Eight]

Interesting. Not a positive report. 

[grapau27]

24 minutes ago, NavArch64 said:

quote from 8-K ... It is uncertain as to whether we will need to suspend additional sailings and to what extent, although once such suspension ends, we still do not expect to return to normal sailings for some time. The suspension of sailings and the expected reduction in demand for future cruising once we resume sailing has led to a significant decline in our revenues and cash inflows, which has required us to take cost and capital expenditure containment actions. Consequently, we have reduced and furloughed our workforce, with approximately 23% of our U.S. shoreside employee base being impacted and, except for the minimum safe manning shipboard crew required to operate the ships during the suspension of operations, our shipboard crew were notified that their contracts would end early and they would be notified about new assignments when operations resume in the future. As a result of these actions, we may be challenged in rebuilding our workforce which could further delay our return to service. In addition, we have reduced our planned capital spending through 2021, which may negatively impact our execution of planned growth strategies, particularly as it relates to investments in our ships, technology, and our expansion of land-based developments. Furthermore, we have taken actions to monitor and mitigate changes in our supply chain, and port destination availability, which may strain relationships with our vendors and port partners. We have not been notified by the CDC of any intention to extend the current “no sail” order beyond the current specified outside date of October 31, 2020, and we currently have no further information as to when the CDC will respond to our recommendations or make any announcement. Such responses will determine the timing and implementation of our plans to return to service which we expect to be gradual, and, with certain limited exceptions, including those described above, to include commercial sailings commencing no earlier than December 1, 2020. Based on the status of our discussions with the CDC and all recent communications with respect to our submitted plan, including consideration of the “no sail” order, as well as the best information available to us as of the date of this Current Report on Form 8-K, we remain optimistic that we will be able to commence commercial sailings in 2020; however, we can provide no assurance that we will be able to return to service within such timeframe. Any protocols we adopt in line with these recommendations may be costly to implement across our fleet and they may be less effective than we expect in reducing the risk of infection and spread of COVID-19 on our cruise ships, which will negatively impact our operations and expose us to reputational and legal risks. Due to the unprecedented and uncertain nature of the COVID-19 pandemic, it is difficult to predict the impact of further disruptions and their magnitude. The impact of further disruptions may depend on how they coincide with the timing of when we seek to resume sailing. In addition, we have never previously experienced a complete cessation of our cruising operations, and as a consequence, our ability to predict the impact of such a cessation on our brands and future prospects is limited and such impact is uncertain.

 

 

Thanks for posting.

[grapau27]

21 minutes ago, Milwaukee Eight said:

Interesting. Not a positive report. 

Our 2-20-21 cruise on P&O(carnival group) was cancelled over 3 weeks ago.

Hopefully Royal can start soon.

Graham.

[Vera/Lee]

30 minutes ago, NavArch64 said:

quote from 8-K ... It is uncertain as to whether we will need to suspend additional sailings and to what extent, although once such suspension ends, we still do not expect to return to normal sailings for some time. The suspension of sailings and the expected reduction in demand for future cruising once we resume sailing has led to a significant decline in our revenues and cash inflows, which has required us to take cost and capital expenditure containment actions. Consequently, we have reduced and furloughed our workforce, with approximately 23% of our U.S. shoreside employee base being impacted and, except for the minimum safe manning shipboard crew required to operate the ships during the suspension of operations, our shipboard crew were notified that their contracts would end early and they would be notified about new assignments when operations resume in the future. As a result of these actions, we may be challenged in rebuilding our workforce which could further delay our return to service. In addition, we have reduced our planned capital spending through 2021, which may negatively impact our execution of planned growth strategies, particularly as it relates to investments in our ships, technology, and our expansion of land-based developments. Furthermore, we have taken actions to monitor and mitigate changes in our supply chain, and port destination availability, which may strain relationships with our vendors and port partners. We have not been notified by the CDC of any intention to extend the current “no sail” order beyond the current specified outside date of October 31, 2020, and we currently have no further information as to when the CDC will respond to our recommendations or make any announcement. Such responses will determine the timing and implementation of our plans to return to service which we expect to be gradual, and, with certain limited exceptions, including those described above, to include commercial sailings commencing no earlier than December 1, 2020. Based on the status of our discussions with the CDC and all recent communications with respect to our submitted plan, including consideration of the “no sail” order, as well as the best information available to us as of the date of this Current Report on Form 8-K, we remain optimistic that we will be able to commence commercial sailings in 2020; however, we can provide no assurance that we will be able to return to service within such timeframe. Any protocols we adopt in line with these recommendations may be costly to implement across our fleet and they may be less effective than we expect in reducing the risk of infection and spread of COVID-19 on our cruise ships, which will negatively impact our operations and expose us to reputational and legal risks. Due to the unprecedented and uncertain nature of the COVID-19 pandemic, it is difficult to predict the impact of further disruptions and their magnitude. The impact of further disruptions may depend on how they coincide with the timing of when we seek to resume sailing. In addition, we have never previously experienced a complete cessation of our cruising operations, and as a consequence, our ability to predict the impact of such a cessation on our brands and future prospects is limited and such impact is uncertain.

 

 

This is interesting, but not unexpected. Did you hear Nabarro (WHO's Special Envoy on Covid-19) appeal to world leaders to stop using lock downs as their primary control methods, because of the potentially serious negative consequences of them? He said it seems we may well have a doubling of world poverty by next year and at least a doubling of child malnutrition. He specifically mentioned the Caribbean. He said "the only time we believe a lockdown is justified is to buy you time to reorganize, regroup and rebalance your resources, protect your healthcare workers who are exhausted, but by and large, we'd rather not do it". Personally, I believe that Royal has done this and have a plan to restart cruising as safely as possible. As stated in this 8-K the impact of Royal is uncertain, but we can also see the effects on a lot of people and businesses across our nation and the world. 

 

[time4u2go]

Wow really nothing positive in that report.

[sandebeach]

Quite a sobering reality. 

[ATC cruiser]

I think to most people it was not really unexpected. Even if they do start cruising in December it will be a very long time before things are close to normal.

[twangster]

It's an SEC filing.  They have to lay out the reality for investors so no investors sues them for suggesting they are about to make gobs of money.

[NavArch64]

As far as I understand it, according to US Law, all statements in an SEC filing are to be accurate and objective as of that date. RCCL (the Corporation) expects to raise $1B from this action. This filing therefore gives us the best insight into the complex situation of restarting the cruise enterprise in North America.

[pcur]

Well, we've done our part to help RCCL out:  we've booked and paid in full 3 cruises from 11/2021 to 3/2022.

 

I'm going to guess that in order to lure their staff back, they will have to offer hiring bonuses, and I fully expect the daily gratuities will be increased by the end of next year.

 

Also a guess:  they will keep the cruise prices competitive, but increase onboard pricing.  So, if you are positive you want to sail, and see a drink package or specialty dining promo, I would add it to your booking and pay for it.

 

I do NOT think RCCL will go out of business, but I DO think they will start charging more for things above and beyond the cruise price.

Edited October 13, 2020 by pcur

[mac_tlc]

4 hours ago, twangster said:

It's an SEC filing.  They have to lay out the reality for investors so no investors sues them for suggesting they are about to make gobs of money.

Exactly. And if it is in conjunction with raising capital, it never reads positive. It needs to list all possible risks to the company, and there are always a lot of them —- for any company—— especially a cruise line in 2020. 
 

For a positive spin, read the next earnings release press release, regardless of the quarterly results. 
 

Different audiences, different spin. 
 

mac_tlc

[yogimax]

4 hours ago, twangster said:

It's an SEC filing.  They have to lay out the reality for investors so no investors sues them for suggesting they are about to make gobs of money.

They are already being sued.

Edited October 13, 2020 by yogimax

[twangster]

22 minutes ago, yogimax said:

They are already being sued.

 

At any given moment Royal has thousands of cases filed against them from investors to grandma's who think the coffee was too hot.  

 

Every investor filing is stated to avoid additional lawsuits when investors make stupid choices.  That doesn't mean some stupid investor isn't going to file a suit.

Edited October 13, 2020 by twangster

[yogimax]

1 hour ago, twangster said:

 

At any given moment Royal has thousands of cases filed against them from investors to grandma's who think the coffee was too hot.  

 

Every investor filing is stated to avoid additional lawsuits when investors make stupid choices.  That doesn't mean some stupid investor isn't going to file a suit.

I wouldn't assume that all lawsuits are filed by "stupid" people.  Many class action lawsuits against major corporations have succeeded.

[Billy Baltic]

3 hours ago, mac_tlc said:

Exactly. And if it is in conjunction with raising capital, it never reads positive. It needs to list all possible risks to the company, and there are always a lot of them —- for any company—— especially a cruise line in 2020. 
 

For a positive spin, read the next earnings release press release, regardless of the quarterly results. 
 

Different audiences, different spin. 
 

mac_tlc

As a paying customer, I’ll take the reality over the spin thank you. 

[livingonthebeach]

Wow - Stock 13% down in value.  Not looking good.

[Sunshine3601]

They summed up the reality of this very good Imo.  

I wonder what is happening with some of the crew that called to report to miami end of this month.  

I'm sure they dont want to fly them here and have to fly them right back home.  Does the crew pay for their own flight.  Rcl spent a huge chunk of money to get the crew home after several months stuck on ships due to all the travel restrictions earlier this year.

God bless all of them.  I'm sure alot of them are struggling to make ends meet back home.  I have no idea if countries like india  phillipines indonesia etc have unemployment like we do in the US.  Even if they do that doesnt last long.

I'm so thankful to have everything I have and thankful for my job too!

 

Edited October 14, 2020 by Sunshine3601

[bigrednole]

In my opinion, cruise lines are gearing up to start bankruptcy talks. There is no reason cruise ships cannot sail as long as airlines can fly, Uber/Lyft can operate, theme parks can remain open, schools can be open, WalMart/Home Depot and the like be open. The $1B they announced yesterday was a clear indication that they are in dire need for the CDC to open. If I were RCL, I would be negotiating with the Bahamas to start cruising from there. They can do private islands and cruise to nowhere. They can charter flights from FLL and MIA to the Bahamas to load the ships. They could, if they wanted, bypass the entire US system for cruising. 

 

The CDC has had epic failure with Covid. Everyone must social distance and wear masks. Oh, this mask is not safe. 2 months later that mask is actually safer. This is only an airborne virus, it is not passed through physical touching of surfaces. You must maintain 6 feet of separation...but not an airplane. It is not possible to contract or pass the virus on an airplane. They have the magical fairy antivirus air in an airplane. 

[livingonthebeach]

RCG is trying to raise 1 billion - half in equity and half in debt.  That’s the reason all three cruise line stocks tanked yesterday and are lower in the futures market this morning.   Let’s hope they can come out of this relatively unscathed.  Of all the industries, they have suffered the most and bankruptcy is no longer out of the question.

[bouhunter]

4 hours ago, bigrednole said:

 They can charter flights from FLL and MIA to the Bahamas to load the ships.

That is assuming there are "loads" of people ready to mask up and get on a ship full of restricted facilities and activities.  That remains to be seen. 

 

But it's a moot point anyway, they aren't moving to the Bahama's.......

Edited October 14, 2020 by bouhunter

[bigrednole]

I know they aren't. But they can shift their entire fleet out of the US if necessary to sail. There are plenty of people ready to sail and vacation. The issue in the US is the CDC won't let people.

[Milwaukee Eight]

8 minutes ago, bigrednole said:

I know they aren't. But they can shift their entire fleet out of the US if necessary to sail. There are plenty of people ready to sail and vacation. The issue in the US is the CDC won't let people.

Actually, I think it’s COVID19 that is preventing the cruise lines from sailing out of the US. 
 

M8

[bouhunter]

They may indeed be able to fill the ships at 50% or whatever their goal.  But that is not guaranteed.  A few hundred diehards posting at cruise critic is not indicative that a lot of the general public is ready to cruise.  There are SO many reasons people won't sail yet:

 

- Fear of virus

- Fear of being stuck in quarantine

- Masks

- Limited ports

- Numerous restrictions onboard

- Fear of air travel

- Etc etc etc

 

Every one of these issues is going to chip away a percentage of guests for the foreseeable future.  

[bouhunter]

4 minutes ago, Milwaukee Eight said:

Actually, I think it’s COVID19 that is preventing the cruise lines from sailing out of the US. 
 

M8

Good point 🙂