Royal Caribbean Group, the second-biggest cruise company in the world, released its earnings for the year 2022 and has provided forward guidance for 2023. The company reported a much lower-than-expected fourth-quarter 2022 Loss per Share of $(1.96) and an Adjusted Loss per Share of $(1.12).
These numbers exceed the company’s previous guidance. It shows the Royal Caribbean Group’s overwhelming success since its full return to service early in 2022, combined with better pricing on close-in demand, strong onboard spending results, and lower interest expenses.
Royal Caribbean Group Keeps Investors Happy
Royal Caribbean Group’s stock price jumped more than 9% after the markets opened on February 7, a result of the strong numbers presented by Jason Liberty, the president and chief executive officer of Royal Caribbean Group.
The cruise company exceeded its own guidance and posted a much lower-than-expected loss per share of $(1.96) and an Adjusted Loss per Share of $(1.12). The company returned to positive adjusted EBITDA and operating cash flow, and is seeing the strongest WAVE season in history.
Jason Liberty said: “2022 was a pivotal year as we successfully returned our business to full operations and delivered memorable vacation experiences to 6 million guests. Our teams have worked tirelessly to deliver the best vacation experiences responsibly, and we are grateful for their extraordinary efforts.”
“We are experiencing a record-breaking WAVE season, resulting in a booked position approaching previous record highs and at higher prices. The combination of our industry-leading global brands, most innovative fleet, nimble sourcing and our continued focus on profitability positions us well to deliver record yields and Adjusted EBITDA in 2023.”
Some of the highlights in the fourth quarter of 2022 and the entire year of 2022 include the load factors, which were in line with expectations at 95%, with Caribbean sailings reaching 100%, and holiday sailings operating close to 110%. Revenue per passenger cruise day was up 3,5% compared to the fourth quarter in 2019.
“Fourth quarter results reflect the continued strong demand for our vacation experiences and our teams’ ability to manage costs in a complicated environment while staying focused on delivering the best vacation experiences expected by our guests,” said Naftali Holtz, chief financial officer, Royal Caribbean Group.
Royal Caribbean Group reported a total net loss of 2.2 billion over 2022 or $(8.45) per share, and the Adjusted Net Loss was $(1.9) billion or $(7.50) per share.
Looking Forward to 2023
The future is looking bright for Royal Caribbean Group. As the cruise company continues to build on the strong results from 2023, they are experiencing an incredible surge in demand and bookings, leading to a record-breaking start to the year.
The seven biggest booking weeks in the company’s history have all happened since November 2022. For 2023, the booked position is on-par or even exceeding the numbers seen during 2019.
People are eager to travel again with Royal Caribbean International, Celebrity Cruises, and Silversea, boosted in part by the arrival of three new ships to the fleet this year, including Icon of the Seas, Celebrity Ascent, and Silver Nova.
“Leisure travel strength continues as consumer spend is shifting towards experiences, with cruising remaining an attractive value proposition,” said Liberty. “The quality demand trends further exhibit the strength of our brands and the growing propensity to cruise.”
Since the start of the year, Royal Caribbean Group has been making a serious impact. The cruise line’s stock price gained more than 55%, or $26. With a future that is looking bright, the cruise company will likely be making its way back to profitability in the near future.
It’s not all sunshine and happiness for Royal Caribbean, though. The cruise company has recorded a loss contingency of $130 million related to a Helms-Burton Act claim. While the company is fighting it vigorously, it could mean a serious impact if the damages are awarded.