MIAMI - Royal Caribbean Cruises Ltd. reported 2018 US GAAP earnings of $8.56 per share and adjusted earnings of $8.86 per share. In addition, the company announced that 2019 adjusted earnings are expected to be in the range of $9.75 to $10.00 per share.
Key highlights
Full Year 2018:
- US GAAP Net Income was $1.8 billion or $8.56 per share and Adjusted Net Income was $1.9 billion or $8.86 per share in 2018 versus US GAAP and Adjusted Net Income of $1.6 billion or $7.53 per share in 2017.
- Gross Yields were up 3.8% in Constant-Currency (up 3.9% As-Reported). Net Yields were up 4.4% in Constant-Currency (up 4.5% As-Reported).
- Gross Cruise Costs per Available Passenger Cruise Days increased 3.0% in Constant-Currency (up 3.2% As-Reported). Net Cruise Costs excluding Fuel per APCD were up 4.1% in Constant-Currency (up 4.4% As-Reported).
Full Year 2019 Outlook:
- Adjusted earnings are expected to be in the range of $9.75 to $10.00 per share.
- Net Yields are expected to increase 6.5% to 8.5% in Constant-Currency and 6.0% to 8.0% As-Reported. These metrics include approximately 350 basis points from the operation of Silversea, the new cruise terminal in Miami and the Perfect Day development.
- NCC excluding Fuel per APCD are expected to increase 8.5% to 9.0% in Constant-Currency and 8.25% to 8.75% As-Reported.
These metrics include approximately 650 basis points from the operation of Silversea, the cruise terminal in Miami and the Perfect Day development.
Full Year 2018
US GAAP Net Income for the year was $1.8 billion or $8.56 per share and Adjusted Net Income was $1.9 billion or $8.86 per share. This result beat the January 2018 mid-point guidance by $0.21 per share and equates to a 17.5% year-over-year growth in adjusted earnings per share. This result was achieved despite the unfavorable impact from currency and fuel which negatively affected earnings by approximately $123 million or $0.58 per share versus the January 2018 guidance.
US GAAP Net Income for the year was $1.8 billion or $8.56 per share and Adjusted Net Income was $1.9 billion or $8.86 per share. This result beat the January 2018 mid-point guidance by $0.21 per share and equates to a 17.5% year-over-year growth in adjusted earnings per share. This result was achieved despite the unfavorable impact from currency and fuel which negatively affected earnings by approximately $123 million or $0.58 per share versus the January 2018 guidance.
"This year our teams achieved record financial results while introducing four new vessels, acquiring Silversea Cruises, inaugurating two stunning cruise terminals and implementing Excalibur on about half of our fleet," said Richard D. Fain, chairman and CEO. "By any measure 2018 was a particularly stellar year, and the strong Wave makes us optimistic about 2019 as well."
Net Yields were up 4.4% in Constant-Currency. Strong demand for our core products, better onboard revenues and the consolidation from Silversea's operations drove the year-over-year increase.
NCC excluding Fuel per APCD were up 4.1% in Constant-Currency. The main drivers behind the year-over-year increase were more drydock days, the lapping of hardware changes, investments in technology and the consolidation of Silversea's operations.
Fourth Quarter Results
US GAAP Net Income for the fourth quarter was $315.7 million or $1.50 per share and Adjusted Net Income was $322.1 million or $1.53 per share. Last year, US GAAP and Adjusted Net Income were $288.0 million or $1.34 per share.
US GAAP Net Income for the fourth quarter was $315.7 million or $1.50 per share and Adjusted Net Income was $322.1 million or $1.53 per share. Last year, US GAAP and Adjusted Net Income were $288.0 million or $1.34 per share.
Gross Yields were up 7.3% in Constant-Currency. Net Yields were up 6.8% in Constant-Currency, slightly better than the midpoint of guidance.
Gross Cruise Costs per APCD increased 6.1% in Constant-Currency. NCC excluding Fuel per APCD were up 5.1% in Constant-Currency, lower than guidance, driven by timing.
Favorability from depreciation and our joint ventures also contributed to the quarter's positive performance.
Lastly, a combination of a stronger dollar and fuel rates negatively impacted the quarter by $0.04.
Bunker pricing net of hedging for the fourth quarter was $546.70 per metric ton and consumption was 357,700 metric tons.
Full Year 2019
The company expects full year Adjusted EPS guidance to be in the range of $9.75 to $10.00 per share.
The company expects full year Adjusted EPS guidance to be in the range of $9.75 to $10.00 per share.
Wave Season has started on a strong note and the company's overall booked position for 2019 is better than last year's record high and at higher rates. Demand for our main products is strong across all quarters.
The company expects a Net Yield increase in the range of 6.5% to 8.5% in Constant-Currency and 6.0% to 8.0% As-Reported for the full year. These metrics include approximately 350 basis points from the operation of Silversea, the cruise terminal in Miami and the Perfect Day water-park and resort on the island of Cococay in The Bahamas, which will launch in May of 2019. As an ultra-luxury brand, Silversea's revenues and expenses, on a per APCD basis, are both higher than the company's average. Moreover, our new Miami based terminal and Perfect Day will also increase both our revenue and cost metrics, since their additions do not include APCDs. As such, we have provided the impact of these items on our yield and cost metrics' forward guidance.
"Our yield outlook for 2019 is very encouraging" said Jason T. Liberty, executive vice president and CFO. "Demand for our brands continues to accelerate and we are well positioned for another year of double-digit growth in our earnings per share."
We are also very excited about the introduction of Celebrity Flora in May 2019 - the first ship designed for the Galapagos - and the introduction of Spectrum of the Seas in the China market in June 2019. These new ships will also be contributors to 2019 yield growth.
NCC excluding Fuel are expected to be up 8.5% to 9.0% in Constant-Currency and 8.25% to 8.75% As-Reported. These metrics include approximately 650 basis points from the operation of Silversea, the cruise terminal in Miami and the Perfect Day development.
Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company estimates 2019 Adjusted EPS will be in the range of $9.75 to $10.00 per share.
First Quarter 2019
Net Yields are expected to increase 7.5% to 8.0% in Constant-Currency and 5.5% to 6.0% As-Reported. These metrics include approximately 375 basis points from the operation of Silversea and the cruise terminal in Miami.
Net Yields are expected to increase 7.5% to 8.0% in Constant-Currency and 5.5% to 6.0% As-Reported. These metrics include approximately 375 basis points from the operation of Silversea and the cruise terminal in Miami.
NCC excluding Fuel per APCD for the quarter are expected to be up approximately 10% in Constant-Currency (up 9.0% to 9.5% As-Reported). These metrics include approximately 800 basis points from the operation of Silversea, the cruise terminal in Miami and the Perfect Day development.
The company also noted that Silversea's seasonality is similar to RCL's core products. Silversea, which was acquired on July 31 2018, will be accounted for on a one quarter lag. Its traditionally weaker fourth quarter will therefore be included in RCL's first quarter results.
Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects first quarter Adjusted EPS to be approximately $1.10 per share.
