RCL Third Quarter Conference Call

[RICCruisers]

The Q3 call just ended.  There were no specific answers about when cruising will resume.  There was an answer that when it does start that it will begin with some short 3 to 5 night non revenue cruises on probably 1 or 2 ships. They are still in talks with the CDC about the No Sail Order.  No indication about if they expect an extension past October 31.  They did express some concern about the uptick of cases being reported and the possible second wave.  Richard Fain was very explicit about using science as their guide when it comes to resuming cruises and leaned very heavily on the 74 recommendations from the Healthy Sail Panel.  Their financial condition was discussed and they are confident that they have the liquidity to get through the current situation.  There were several mentions about how the Quantum sailing out of Singapore sold out quickly and that it had about 3 times the demand than what they thought it would have. 

 

Others that listened in will probably have additional and possibly contradictory comments to what I am reporting.

 

 

[marieps]

Thanks for the info.  I very much doubt my Feb 26 Connie voyage will happen.  It will be the fourth cruise we either shifted, got cancelled or cancelled ourselves.  

Edited October 29, 2020 by marieps

[kk99]

Nothing contradictory to add.  I appreciated the posting. I listened to the call this morning and read the 8-K report.  Here is a newswire clip

 

0:35 ET - Royal Caribbean is planning for a gradual return to service in 1H, Finance Chief Jason Liberty says. "The ramp up will not be a light switch," Liberty says on a conference call. The company has paused sailings through the end of November, a month past the CDC's expiration of its cruising ban this Saturday. Spring cruises will be focused on short sailings from key dry markets in the US and Asia-Pacific regions, Liberty says. The company will make the most out of its private island in the Bahamas, he adds. "Bookings for the spring season have remained below pre-COVID-19 levels, which is consistent with our staggered return to service approach and lower planned occupancy expectations," Liberty says. 

 

 

Mr. Fain stated that with the start of all cruises, the first will be nonrevenue cruises , everyone will be covid tested , masks, shore excursions through the ship, and short cruises as has been previously reported on the boards.

Mr. Liberty stated that the monthly cash burn for the entire group was between 250-290 million per month which was consistent with prior posts.

 

The SEC filing which shows the financial picture for 2020 Quarter 3 is here.

http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=115406726&type=HTML&symbol=RCL&companyName=Royal+Caribbean+Group&formType=8-K&dateFiled=2020-10-29&CK=884887

 

I can only hope that the company will go ahead and announce what additional future sailings for the rest of this year and perhaps the first quarter of 2021 will be canceled. In the event that does not happen, then I can hope that the lift and shift  program to be extended past November 2020 so that the customers have additional options.  

 

 

 

 

 

 

 

 

[gerelmx]

Royal Caribbean Group reports $1.3 billion loss in third quarter

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjB546wr9rsAhUKLKwKHdBXAfsQxfQBMA56BAgpEAg&url=https%3A%2F%2Fwww.*****.com%2F2020%2F10%2F29%2Froyal-caribbean-group-reports-13-billion-loss-third-quarter&usg=AOvVaw3HD-9z7HiWobVpZ-q6tUsI

 

Royal Caribbean Provides Business Update, Q3 Results

https://www.cruiseindustrynews.com/cruise-news/23776-royal-caribbean-provides-business-update-q3-results.html

Edited October 29, 2020 by gerelmx

[Oceangoer2]

6 hours ago, RICCruisers said:

The Q3 call just ended.  There were no specific answers about when cruising will resume.  There was an answer that when it does start that it will begin with some short 3 to 5 night non revenue cruises on probably 1 or 2 ships. They are still in talks with the CDC about the No Sail Order.  No indication about if they expect an extension past October 31.  They did express some concern about the uptick of cases being reported and the possible second wave.  Richard Fain was very explicit about using science as their guide when it comes to resuming cruises and leaned very heavily on the 74 recommendations from the Healthy Sail Panel.  Their financial condition was discussed and they are confident that they have the liquidity to get through the current situation.  There were several mentions about how the Quantum sailing out of Singapore sold out quickly and that it had about 3 times the demand than what they thought it would have. 

 

Others that listened in will probably have additional and possibly contradictory comments to what I am reporting.

 

 

Thanks for posting....baby steps forward and at least some news!

[hcat]

Thanks for these updates and links. 

I am curious  about  the total value  of  the  outstanding " future  cruise credits" that have been issued and remain unused;   and how they are treated on the balance sheet.    Also wondering how long we will be expected to carry these FCCs ourselves, as the  usage deadlines  have been extended.....

 

If things do not get going in 2021,  we might ve willing to accept a  50%  refund to our card...,,,not going to happen but just  a thought,

[LGW59]

5 hours ago, gerelmx said:

Royal Caribbean Group reports $1.3 billion loss in third quarter

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjB546wr9rsAhUKLKwKHdBXAfsQxfQBMA56BAgpEAg&url=https%3A%2F%2Fwww.*****.com%2F2020%2F10%2F29%2Froyal-caribbean-group-reports-13-billion-loss-third-quarter&usg=AOvVaw3HD-9z7HiWobVpZ-q6tUsI

 

Royal Caribbean Provides Business Update, Q3 Results

https://www.cruiseindustrynews.com/cruise-news/23776-royal-caribbean-provides-business-update-q3-results.html

$1.3billion, that's one hell of a lot of cruises

[Baron Barracuda]

Amazing how in only 9 months debt and other liabilities increased from $17B to $23B (despite $1.6B decrease in customer deposits) while stockholders equity shrank from $12B to $8B.

[TeeRick]

11 hours ago, Baron Barracuda said:

Amazing how in only 9 months debt and other liabilities increased from $17B to $23B (despite $1.6B decrease in customer deposits) while stockholders equity shrank from $12B to $8B.

So what does this amazing detail imply to you?  What is your take on this?

[Baron Barracuda]

7 hours ago, TeeRick said:

So what does this amazing detail imply to you?  What is your take on this?

Even with no sail lifted 4th quarter will be total washout, draining a further $1B in cash.  Operating at reduced capacity plus some markets slow to reopen 1Q and maybe 2Q '21 will also be cash flow negative.  Odyssey of the Seas will add $1B in debt next year.  A recent debt and equity offering will cover $350MM of debt maturing this quarter but a further $1.3B comes due next year and will have to be refinanced.  Company is becoming highly leveraged with interest expense up to $100mm/qtr.  Many ships are already pledged as collateral against existing debt so have to wonder about ability to raise additional cash.  And that's without additional covid related sailing disruptions.  It promises to be a cruel winter for RCG, hopefully things will improve in the spring.

[TeeRick]

16 hours ago, Baron Barracuda said:

Even with no sail lifted 4th quarter will be total washout, draining a further $1B in cash.  Operating at reduced capacity plus some markets slow to reopen 1Q and maybe 2Q '21 will also be cash flow negative.  Odyssey of the Seas will add $1B in debt next year.  A recent debt and equity offering will cover $350MM of debt maturing this quarter but a further $1.3B comes due next year and will have to be refinanced.  Company is becoming highly leveraged with interest expense up to $100mm/qtr.  Many ships are already pledged as collateral against existing debt so have to wonder about ability to raise additional cash.  And that's without additional covid related sailing disruptions.  It promises to be a cruel winter for RCG, hopefully things will improve in the spring.

Thank you so much for the detailed answer and your thoughts.  Much appreciated.