Royal Caribbean Group has raised its outlook for this year as it posted a higher-than-expected $1bn profit for the third quarter.
The New York-listed cruise ship operator reported robust earnings on Thursday against a much lower $32.9m profit for the same period last year.
On an adjusted basis, Miami-based Royal Caribbean recorded $1.07bn in profit for the quarter, up from $65.8m in earnings a year earlier.
The adjusted results translated into $3.85 earnings per share for the three-month period, beating an analyst consensus of $3.48 per share and blowing away the year-ago EPS of $0.26.
Third-quarter revenue came in at $4.16bn for the third quarter, up from $2.99bn collected in the corresponding period of 2022.
These higher figures prompted the owner of 52 cruise ships to raise its 2023 adjusted EPS guidance to between $6.58 and $6.63 as part of its third-quarter earnings.
That guidance is up from the previous guidance of between $6 and $6.20 submitted with second-quarter earnings.
“The strength of our brands and the acceleration of consumer spending on experiences have propelled us towards another outstanding quarter and a robust 2023,” chief executive Jason Liberty said.
“Looking ahead, we see accelerating demand as we build the business for 2024.”
Royal Caribbean’s Covid-driven debt totalled $17.9bn as of 30 September, down from $21.3bn as of 31 December 2022.
Royal Caribbean repaid $775m of debt in the third quarter, including $500m of its 11.5% senior secured notes due in June 2025. As a result, S&P upgraded the company’s credit rating to BB- with a stable outlook and Moody’s upgraded the company’s credit rating to B1 with a positive outlook.
As of 30 September, the company’s liquidity was $3.3bn, which includes cash and cash equivalents and undrawn revolving credit facilities.
“Our strong performance and commitment to strengthening the balance sheet will allow us to pay off over $3.5bn of debt by the end of this year and is being favourably recognised by our financial partners and the rating agencies,” chief financial officer Naftali Holtz said in a statement.
“We continue to strategically invest in our future while utilising excess cash flow to pay down debt, consistent with our trifecta-related goal of returning to investment grade metrics.”
As of 30 September, Royal Caribbean held scheduled debt maturities of $700m for this year, $2.3bn for 2024 and $2.8bn for 2025 and 2026.
