Royal Caribbean upgrades profit forecast again following record wave period
Harry KembleRoyal Caribbean Group has increased its full-year profit forecast from $10.70 to $10.90 per share for a second time following the strongest wave season in the company’s history.
Reporting its first quarter financial results on Thursday (25 April), the cruise giant – which operates Royal Caribbean International, Celebrity Cruises and Silversea Cruises – announced it expects to achieve all of its Trifecta financial goals this year.
These include triple digit earnings before interest, taxes, depreciation and amortisation (EBITDA), return on invested capital “in the teens” and double-digit earnings per share a year earlier than prior expectations.
During its last earnings call in February, Liberty said the company believed it would achieve “two of our trifecta goals one year early”.
It is the second time Royal had raised its full-year profit forecast. In February, its guidance was for a range of $9.50 to $9.70, but three weeks later that was upped to $9.90 to $10.10.
On Thursday (26 April), the group reported a total revenue of $3.7 billion for the first three-month period of 2024 and a net income of $360 million, compared to a net loss of $48 million in the same period last year, the group added.
As of 31 March, the group’s customer deposit balance stood at $6 billion, while load factors were 107%.
Jason Liberty, group president and chief executive, said: "Demand for our leading brands and the incredible experiences they deliver continues to be very robust, resulting in outperformance in the first quarter, a further increase of full year earnings guidance, and 60% expected earnings growth year over year.
"Building on this momentum, we expect to achieve all our Trifecta financial goals in 2024, which allows us to focus on a new era of growth to drive long-term shareholder returns and take a greater share of the rapidly growing $1.9 trillion global vacation market."
Liberty noted how Royal’s Utopia of the Seas and Silversea’s Silver Ray are launching this summer while the company has also announced its expanding its Royal Beach Club portfolio in Cozumel. The site is expected to open the club in 2026.
Royal launched the world’s largest cruise ship, Icon of the Seas, earlier this year
“These strategies will further propel our leadership in the cruise industry and push us to new heights in the vacation industry,” he added.
In the second quarter, net yields are expected to increase 10.20% to 10.70%. Net Cruise Costs (NCC), though, are expected to jump from 7.4% to 7.9% due to increased dry dock days and the operations of Hideaway Beach at Royal’s Perfect Day at CocoCay site.
Harry Kemble
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