Royal Caribbean repays $600 million of debt in Q4, targets IG metrics

By Devika Patel

Knoxville, Tenn., Feb. 7 – Royal Caribbean Group repaid $600 million of debt last quarter and refinanced $2 billion of secured and guaranteed debt previously due in June 2023 as part of ongoing efforts to improve the balance sheet and manage near-term maturities with a view towards achieving investment-grade credit metrics.

The company also extended $2.3 billion of its revolving credit facility commitment to 2025 in January.

“During the fourth quarter, we repaid $600 million of debt maturities and closed on the refinancing of $2 billion of secured and guaranteed debt previously due June 2023,” chief financial officer Naftali Holtz said on the company’s fourth quarter and year ended Dec. 31, 2022 earnings conference call on Tuesday.

“Additionally, in January, we successfully extended $2.3 billion of our existing revolving credit facility commitment to April 2025.

“For 2023, our scheduled debt maturities are $2.1 billion, made up of predominantly ECA debt amortization, which we expect to pay down with cash on hand and cash flow generated from operations,” Holtz said.

The company is focused on improving yields and lowering costs while managing near-term maturities to help boost the balance sheet.

“Our liquidity remains strong and we are focused on expanding our margins to further enhance EBITDA and free cash flow,” Holtz said.

“Our ultimate goal is to return the balance sheet to an investment-grade profile.

“Our access to capital remains strong and our execution and performance will resonate with our investors and financial partners.

“We will proactively and methodically continue to manage near-term maturities and improve the balance sheet.

“Our business continues to accelerate and we expect to grow yields and control costs, such as we achieve record yields and adjusted EBITDA in 2023 as we regain the tremendous profitability of our business,” Holtz said.

Total revenues for the quarter were $2.6 billion and adjusted EBITDA was $409.3 million.

Total revenues were $8.8 billion for the year and adjusted EBITDA was $711.6 million.

As of Dec. 31, 2022, Royal Caribbean’s liquidity position was $2.9 billion, which included cash and cash equivalents, undrawn revolving credit facility capacity and a $700 million commitment for a 364-day term loan facility.

Cash and cash equivalents were $1,935,005,000 as of Dec. 31, 2022, compared to $2,701,770,000 as of Dec. 31, 2021.

Long-term debt was $21,303,480,000 as of Dec. 31, 2022, compared to $18,847,209,000 as of Dec. 31, 2021.

Current portion of long-term debt was $2,087,711,000 as of Dec. 31, 2022, compared to $2,243,131,000 as of Dec. 31, 2021.

Royal Caribbean is a Miami-based cruise vacation company.

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