Royal Caribbean Cruises boasts $2.2 billion of liquidity at year's end

By Lisa Kerner

Charlotte, N.C., Feb. 4 - Royal Caribbean Cruises Ltd.'s year-end results were boosted by late bookings, chief executive officer Richard Fain said during the company's 2012 fourth-quarter and full-year earnings call on Monday.

Booking volumes have been running about 20% ahead of the same time last year, according to the company's earnings news release.

"We're happy with the strong bookings we're seeing in the United States, but we're unhappy with the weakness we're seeing in the European Union countries, most notably Spain and the UK," Fain said.

Fain, with a nod to Charles Dickens, said, "The title 'A Tale of Two Continents' simply captures our current situation too well to ignore."

According to Fain, the weakness in southern Europe is "keeping our yields from truly exciting growth."

Liquidity and debt

At Dec. 31, Royal Caribbean had liquidity of $2.2 billion, including cash and the undrawn portion of its unsecured credit facilities.

The Miami-based cruise vacation company's scheduled debt maturities for 2013, 2014, 2015 and 2016 are $1.5 billion, $1.5 billion, $1.1 billion and $1.0 billion, respectively.

Projected capital expenditures for 2013, 2014, 2015 and 2016 are $700 million, $1.2 billion, $1.2 billion and $1.3 billion, respectively, based on current ship orders.

Financial highlights

Fourth-quarter net income before impairment charges was $21.1 million, or $0.10 per share, versus income of $36.6 million, or $0.17 per share, in the prior-year period.

Full-year net income before a non-cash impairment charge of $413.9 million related to the Pullmantur brand was $432.2 million, or $1.97 per share. This compares to net income of $607.4 million, or $2.77 per share, in 2011.

Royal Caribbean forecasts earnings per share of between $2.30 and $2.50 for the full year 2013.

During the fourth quarter, net yield was up 1.8% on a constant-currency basis, above prior guidance of about 1%.

Net cruise costs for the quarter were in line with expectations, up 1.0% on a constant-currency basis and 0.4% on an as-reported basis.

Full-year net yields increased 3.0% on a constant-currency basis, while net cruise costs, excluding fuel, were up 4.2%, also on a constant-currency basis.

As-reported figures have net yields up 1.5% and net cruise costs up 2.7%.

In 2013, net yields are expected to rise 2% to 4%, and net cruise costs, excluding fuel, are expected to be up 2% to 3%. On an as-reported basis, these figures are 3% to 5% for net yields and about 3% for net cruise costs, the company said.

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