Royal Caribbean Group has attributed its $5.8 billion net loss for 2020 to the ‘staggering impact’ of COVID-19.
The cruise ship company also reported an adjusted net loss of $3.9 billion for the year, which was in stark contrast to the adjusted net income of $2.0 billion that it achieved in 2019.
The huge slump in income was inevitable, given that the traffic restrictions imposed in response to the global pandemic have forced so much of the cruise industry to shut up shop. Royal Caribbean Group implemented a voluntary suspension of its cruise operations on 13 March 2020, which has been extended for most ships through to at least 30 April this year.
Commenting on the results, Richard D. Fain, Chairman and CEO, said: ‘The COVID-19 pandemic is having a painful and profound impact on our world and our business; unquestionably, this crisis is the most difficult in the Company's history. But we have been impressed and grateful for the resourcefulness and agility of our team in responding to these unprecedented challenges. More importantly, we remain confident about the ability of our Company to recover and return to the positive trajectory we were on previously.
‘We are encouraged to see the sharp decline in cases and the growing availability of vaccines. We can't wait to get back to the business of showing people the world and making great memories.’
Jason T. Liberty, executive vice president and CFO, added: ’These results reflect the staggering impact that the pandemic brought to our company and the whole industry during 2020. I want to thank all our teams who have risen to the occasion, managing through the toughest year in Royal Caribbean's history.’
In its statement regarding the 2020 full year results issued yesterday (22 February), Royal Caribbean also gave an update on its liquidity actions and fuel purchasing.
On the liquidity front, the company noted that it has taken ‘aggressive actions’ through ‘significant cost and capital reductions, cash preservation measures and by obtaining additional financing’. During 2020, the Company raised approximately $9.3 billion of new capital through a combination of bond issuances, common stock public offerings and other loan facilities.
With regard to bunkering, the company said that – as of 31 December 2020 – it had hedged approximately 40%, 23% and 5% of its total projected metric tonnes of fuel consumption for 2021, 2022 and 2023, respectively.
The company added; ‘The current suspension of the cruise operations due to the COVID-19 pandemic resulted in reductions to the forecasted fuel consumption. As of 31 December 2020, the Company had outstanding fuel swaps of 229,850 and 14,650 metric tonnes maturing in 2021 and 2022, respectively, that no longer hedge the forecasted fuel consumption. For 2021, 2022 and 2023, the annual average cost per metric ton of the fuel swap portfolio is approximately $435, $514, and $580, respectively.‘