Adjusted net loss of $1.2 bn, or $5.62 per share, was higher than Wall Street's expectation for a $5.12/share loss and down from a profit of $4.27/share a year ago. US GAAP net loss was $1.3bn, or $6.29 per share, compared to a $4.20/share profit a year ago.
Total revenue was negative $33.7m, compared to a positive $3.19bn.
Limited cruise operations have resumed outside the US, with three vessels from TUI Cruises and two from Hapag-Lloyd Cruises in July and one Silversea ship, for a limited Red Sea charter, in September. Royal Caribbean International has approval from Singapore to start cruising with Quantum of the Seas in December.
Booking activity for the first half of 2021 is aligned with the company's anticipated staggered resumption of cruises. The cumulative booked position for the second half of 2021 is within historical ranges with prices that are down slightly year-over-year when including the negative yield impact of bookings made with future cruise credits and about flat when excluding them.
This compares to the company's last business update in August when pricing for 2021 bookings was relatively flat year over year when including the negative yield impact of bookings made with FCCs and slightly up year over year when excluding them.
80% new bookings
Eighty percent of 2021 bookings are new — more than 65% of those have come in since August, CFO Jason Liberty said — and the rest are due to the redemption of FCCs and the 'Lift & Shift' program. Royal Caribbean continues to provide customers who were booked on a suspended sailing with the option to request a refund, to receive an FCC or to 'lift and shift' their booking to the following year.
About 50% of customers seek refunds vs. FCCs
As of Sept. 30, the company had $1.8bn in customer deposits. Approximately 50% are FCCs, and $180m correspond to fourth quarter 2020 sailings. Approximately 50% of travelers booked on canceled sailings have requested cash refunds.
Monthly cash burn $250m-$290m
Monthly cash burn was consistent with the company's previous guidance and is estimated to average approximately $250m to $290m, including interest expenses, ongoing ship operating expenses, administrative expenses, hedging costs and expected necessary capital expenditures (net of committed financings in the case of newbuilds). This excludes cash refunds of customer deposits, commissions, debt obligations and cash inflows from new and existing bookings.
When ships start returning to service, Royal Caribbean expects to incur incremental spending as it brings vessels out of their various levels of layup, returns the crew and takes the necessary steps to ensure compliance with the recommended health safety protocols and restarts its sales and marketing activities.
As of Sept. 30, the company had liquidity of approximately $3.7bn, including $3bn in cash and cash equivalents and a $0.7bn commitment from its 364-day facility, compared to $4.1bn as of June 30.
During October, Royal Caribbean raised an additional $1.15bn through a combination of convertible notes and the public offering of common stock.
Total cash spend for the third quarter was approximately $1.1bn, mainly driven by ship operating expenses. These expenses declined each month as the fleet achieved the desired levels of layup by end of August.
Scheduled debt maturities for the remainder of 2020 and 2021 are $0.3bn and $1.3bn, respectively.
Interest expense for the fourth quarter of 2020 is expected to be in the range of $270m to $275m.
Capital expenditures/capacity updates
The expected capital expenditures for the fourth quarter of 2020 and full year 2021 are $0.5bn and $2.1bn, respectively, mostly related to newbuild projects which have committed financing.
Silver Moon is expected to be delivered tomorrow. 2021 deliveries include Odyssey of the Seas during the first quarter and Silver Dawn in the fourth quarter, previously expected to be delayed to 2022.