RCL Stock

[Baron Barracuda]

1 hour ago, 20165 said:

not a great vote of confidence over the weekend when Berkshire pulled out of all airlines.  Granted, 2 different industries, but if he thinks airlines are going to be in trouble, i think cruise lines are really going to be hurting if this drags on longer than q4.  

Would love to be a fly on the wall at the cruise line strategy sessions on how to reopen.  I would definitely buy the strategy book if they manage to pull out of this thing without going into some type of bankruptcy. 

Also not good sign for travel & leisure companies that Disney eliminated their dividend tonight.  They have solid balance sheet and expect parks to recover faster than cruises.

[baldilocks]

I think the cruise industry is now over populated with ships. It will be about two years before anything approaching normal will be with us. The cruise lines will probably look at the cost of each ship and the revenue it can return. Those ships that don't make the cut will be sold or scrapped. I would think that about 1/3 of the ships now sailing will be in the sold or scrapped category.

 

It must be remembered that new pollution control rules are coming into effect that required a more expensive fuel or more efficient scrubbers for exhaust. The newest ships are being powered by LNG. If you look at the design of the new RCL mega ships, they actual float on a platform of small air bubbles that reduce drag. I don't think ships like the Empress of the Seas, Rhapsody of the Seas, etc. will be with us much longer.

 

The BIG question now is can the three big cruise lines stay financially afloat. I expect that NCL may declare bankruptcy if they cannot find new funding. Carnival should be OK. RCL should be OK after a substantial rearrangement of the deck chairs.

 

Right now...I'm just in the mood for a nice cruise. Hopefully our November 29th Harmony cruise is a go.

[Milwaukee Eight]

12 hours ago, baldilocks said:

I don't think ships like the Empress of the Seas, Rhapsody of the Seas, etc. will be with us much longer.

Don’t forget Majesty. 

[Biker19]

There's a new filing at the SEC: https://www.sec.gov/Archives/edgar/data/884887/000110465920058425/tm2018985d1_ex99-1.htm

 

It's mostly about a PR piece. One interesting item is that only 45% customers are opting for refunds.

 

MIAMI – May 8, 2020 – Royal Caribbean Cruises Ltd. (NYSE: RCL) today provided a business update and the Company’s response to the impact of the COVID-19 pandemic.

 

"These are unprecedented times for all of us. Travel restrictions and stay-at-home orders are important to slowing the spread of the virus, but they have severely impacted our operations," said Richard D. Fain, Chairman and CEO. "We are taking decisive actions to prioritize the safety of our guests and crew while protecting our fleet and bolstering liquidity.”

 

COVID-19 Related Suspension

 

The outbreak of COVID-19 has resulted in an unprecedented global response to contain the spread of the disease. These global efforts have resulted in travel restrictions and created significant uncertainty regarding worldwide port closures and availability. As part of the global containment effort, the Company previously announced a voluntary suspension of its global cruise operations from March 13 through at least June 11, 2020. Continued disruptions to travel and port operations in various regions may result in further suspensions.

 

“Our top priority is to ensure the safety of our guests and crew during the suspension period and when we resume operations,” said Mr. Fain. “The Company’s fleet is now either in port or at anchor and we have developed strict protocols to protect our crew that is still onboard our ships.”

 

The Company has been developing a comprehensive and multi-faceted program to address the unique public health challenges posed by COVID-19. This includes, among other things, enhanced screening, upgraded cleaning and disinfection protocols and plans for social distancing. The Company will continue to work with the Centers for Disease Control and Prevention, global public health authorities and national and local governments to enhance measures to protect the health, safety and security of guests, crew and the communities visited when we are out of service and once operations resume.

 

 

 

 

 

Update on Bookings

 

Prior to the outbreak of COVID-19, the Company started the year in a strong booked position and at higher prices on a prior year comparable basis. Given the impact of COVID-19, booking volumes for the remainder of 2020 are meaningfully lower than the same time last year at prices that are down low-single digits. Due to the suspension in sailings, booking trends reflect elevated cancellations for 2020 and more typical levels for 2021 and beyond. Although still early in the booking cycle, the booked position for 2021 is within historical ranges when compared to same time last year with 2021 prices up mid-single digits compared to 2020.

 

The Company has instituted several programs in order to best serve its guests: for cancelled cruises, guests are offered the choice of future cruise credits valued at 125% of the initial cruise fare paid in lieu of providing cash refunds. As of April 30, 2020, approximately 45% of the guests have requested cash refunds. For non-cancelled cruises, the Company has implemented a “Cruise with Confidence” policy.

 

As of March 31, 2020, the Company had $2.4 billion in customer deposits. This includes approximately $0.8 billion of future cruise credits related to previously announced voyage cancellations through June 11, 2020.

 

The Company also continues to take future bookings for 2020, 2021 and 2022, and receive new customer deposits and final payments on these bookings.

 

 

2

 

 

Update on Recent Liquidity Actions and Ongoing Uses of Cash

 

“Since late January, we have undertaken several proactive measures to mitigate the financial and operational impacts of COVID-19.” said Jason T. Liberty, executive vice president and CFO. “Our focus is on bolstering liquidity through significant cost cutting, capital spend reductions, and other cash conservation measures. In addition, the Company is considering additional financing sources. We continue to evaluate all options available to us to further enhance liquidity.”

 

As of April 30, 2020, the Company had liquidity of approximately $2.3 billion all in the form of cash and cash equivalents. On May 4, 2020 the company increased the 364-day senior secured credit facility and drew $150 million further enhancing the Company’s liquidity profile.

 

Reduced Operating Expenses

 

The Company has taken significant actions to reduce operating expenses during the suspension of its global cruise operations:

 

·	Significantly reduced ship operating expenses, including crew payroll, food, fuel, insurance and port charges
·	The Company’s ships are currently transitioning into various levels of layup with several ships in the fleet transitioning into cold layup, further reducing operating expenses
·	Eliminated or significantly reduced marketing and selling expenses for the remainder of 2020
·	Reduced workforce by approximately 26 percent of more than 5,000 shoreside employees in the US
·	Suspended travel for shoreside employees and instituted hiring freeze across the organization.

 

The Company estimates that its average ongoing ship operating expenses and administrative expenses is approximately $150 million to $170 million per month during the suspension of operations. The Company may seek to further reduce this average monthly requirement under a prolonged non-revenue scenario.

 

 

3

 

 

Reduced Capital Expenditures

 

Since the last earnings call, the Company has identified approximately $3.0 billion and $1.4 billion of capital expenditure reductions or deferrals in 2020 and 2021, respectively. The 2020 reductions and deferrals are comprised of:

 

·	$1.2 billion, of non-newbuild, discretionary capital expenditures and

·	$1.8 billion in reduced spend or deferred installment payments for newbuild related payments which the Company is currently finalizing.

 

The Company believes COVID-19 has impacted shipyard operations and will result in delivery delays of ships previously planned for delivery in 2020 and 2021.

 

Debt Maturities, New Financings and Other Liquidity Actions

 

Since the last earnings call, the Company has taken several additional actions to further improve its liquidity position and manage cash flow:

 

·

Increased the capacity under its revolving credit facilities by $0.6 billion, and fully drew on both facilities

 

·

Entered into a $2.35 billion 364-day senior secured credit facility with an option to extend (secured by 28 ships with a net book value of approximately $12 billion as of March 31, 2020)

 

·

Obtained a $0.8 billion, 12-month debt amortization and financial covenant holiday from certain export-credit backed facilities

 

·

Amended its non-export-credit backed bank facilities to incorporate a 12-month financial covenant holiday

 

·

Agreed with its lenders that it will not pay dividends or engage in stock repurchases.

 

As of May 5, 2020, expected debt maturities for the remainder of 2020 and 2021 are $0.4 billion and $0.9 billion, respectively.

 

 

4

 

 

The Company estimates its cash burn to be, on average, in the range of approximately $250 million to $275 million per month during a suspension of operations. This range includes ongoing ship operating expenses, administrative expenses, and debt service expense, hedging costs, expected necessary capital expenditures (net of committed financings in the case of newbuilds) and excludes cash refunds of customer deposits as well as cash inflows from new and existing bookings. The Company is considering ways to further reduce the average monthly requirement under a prolonged out-of-service scenario and during start-up of operations.

 

The Company continues to identify and evaluate further actions to improve its liquidity. These include and are not limited to: further reductions in capital expenditures, operating expenses and administrative costs and additional financings.

 

On March 10, 2020, the Company withdrew its first quarter and full-year 2020 guidance. The magnitude, duration and speed of COVID-19 remains uncertain. As a consequence, we cannot estimate the impact of COVID-19 on our business, financial condition or near or longer-term financial or operational results with reasonable certainty, but we expect to incur a net loss on both a US GAAP and adjusted basis for the first quarter ended March 31, 2020 and the 2020 fiscal year; the extent of which will depend on the timing and extent of our return to service.

Edited May 8, 2020 by Biker19

[taglovestocruise]

From Motley Fool May 9 2020.

Royal Caribbean International (NYSE:RCL) didn't make the same kind of noise as its peers. It didn't follow Carnival into committing to a handful of named ships sailing out of three specific ports this summer. It didn't put out the same cautionary boilerplate language as Norwegian Cruise Line, largely because it lined up necessary financing earlier in this crisis. However, for one of the industry's hardest hit industries of 2020, Royal Caribbean is starting to stand out at the class act in this niche. If you have the stomach to buy into the cruise industry in these uncertain times, you can do worse than buying into Royal Caribbean.

Royal flush 

Before setting up the bullish argument for Royal Caribbean, it needs to be said that buying into the cruise line industry right now is risky business. We may be more than three months away from when any of the publicly traded players are greeting passengers again. We haven't hit rock bottom as lawsuits will continue pile in, negative headlines will keep mounting, and congressional investigations have yet to play out.  

Royal Caribbean stands out in the crowd. Net margins have clocked in at 17.4% or better for Royal Caribbean in each of the past three years. Net income margin has been in the low- to mid-teens for its two rivals in the same timeframe. Gross margin has also been higher than the competition. Margins may be the last thing you're thinking about right now when the cruise fleets are in the process of emptying out their crews this week, but when we are back in business it means that Royal Caribbean will likely be the first player to return to profitability. No player will be immune from the hit that the industry's reputation is in the process of absorbing, and Royal Caribbean hasn't always been a saint here. However, if you had to pick the one cruise line operator that would outlast the competition in the slow recovery, it would have to be Royal Caribbean.Royal Caribbean's superiority isn't a secret. There have been times in recent weeks when Carnival and Royal Caribbean have had comparable enterprise values despite Carnival generating roughly double the revenue of Royal Caribbean. It trades at multiple premiums to its peers, and deservedly so. In these iffy times -- between the drawn-out COVID-19 fallout and the global recession -- if you're going to take a chance, you may as well invest in the best. Royal Caribbean is the best run cruise line.

 

 

[molly361]

I applied for the credit yesterday afternoon and received the confirmation email at 10:15 last night.  Would not have thought that department was open on the weekend.  At least something is happening fast at Royal😇

[Sunshine3601]

Stock on decline again.  Just under $35 moments ago.  Overall market trend is down today.   DH ready to buy more stocks today maybe?   I'm still leery but feel confident that rcl will survive.

[Jimbo]

2 minutes ago, Sunshine3601 said:

Stock on decline again.  Just under $35 moments ago.  Overall market trend is down today.   DH ready to buy more stocks today maybe?   I'm still leery but feel confident that rcl will survive.

I would not buy RCL stock now....................it will go lower. Be patience.

[Baron Barracuda]

RCL just issued another $3.3B in debt using 28 ships as collateral.  Much of the cash will be used to repay other borrowings.

[RG306]

I'm debating purchasing some RCL stock, I'm surprised at how the stock has held and wondering if it'll go back down to $25 and under?  

[Jam0610]

I would wait. They will report earnings/loss at the end of this month. Also next round of cancellations will be coming. I still don't see how they sail on June 12th, as expected. 

[Biker19]

SEC filling this morning:

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/884887/000110465920061054/tm2018985d5_8k.htm

 

On May 13, 2020, Royal Caribbean Cruises Ltd. (NYSE: RCL) (the “Company”) issued a press release announcing that it has priced its private offering of $1.0 billion aggregate principal amount of 10.875% Senior Secured Notes due 2023 (the “2023 Notes”) and $2.32 billion aggregate principal amount of 11.500% Senior Secured Notes due 2025 (the “2025 Notes,” together with the 2023 Notes, the “Notes”). The Notes are expected to be issued on or around May 19, 2020. 

[Biker19]

The stock is down 6%+ this morning.

[Big_G]

If you're an investor and have the stomach to buy into the cruise industry then why wait for it to go any lower. Investors have conviction and are in it for the long hall. If you're just trading highs and lows then it's a fool's errand trying to predict a stock bottom.

[ALWAYS CRUZIN]

2 hours ago, Biker19 said:

The stock is down 6%+ this morning.

But way up from the low when I purchased. 😎

[dodgestang]

39 minutes ago, ALWAYS CRUZIN said:

But way up from the low when I purchased. 😎

 

It wasn't going up fast enough for me....so I bought it, sold it, bought it back, sold it again...and then bought it again 😉

 

Hoping for another little bounce up so I can cash out again......I'm turning into a day trader....gonna be killer on my account come tax season

[Jimbo]

1 minute ago, dodgestang said:

 

It wasn't going up fast enough for me....so I bought it, sold it, bought it back, sold it again...and then bought it again 😉

 

Hoping for another little bounce up so I can cash out again......I'm turning into a day trader....gonna be killer on my account come tax season

You have to wait 30 days though between selling and buying , otherwise you are hit with a fee right?

[dodgestang]

etrade has not hit me with any fees....but.....I am not selling then buying same day......I bought, held for a week or two, then sold.....then bought 3-4 days later.....then sold a few day after that.....then bought again....so saying 'day trader' is a little tongue in cheek

 

Edited May 14, 2020 by dodgestang

[Jimbo]

4 minutes ago, dodgestang said:

etrade has not hit me with any fees....but.....I am not selling then buying same day......I bought, held for a week or two, then sold.....then bought 3-4 days later.....then sold a few day after that.....then bought again....so saying 'day trader' is a little tongue in cheek

 

Happen with me on ameritrade, might have been the type of stock I bought though, It was a drug company.

[PatMunits]

On 5/8/2020 at 9:29 AM, Biker19 said:

It's mostly about a PR piece. One interesting item is that only 45% customers are opting for refunds.

 

Future Cruise Credit (FCC) may quickly turn into one giant PR fiasco for RCL. Processing of FCC for those customers who have been patient and allowed RCL to take their time to handle automatically (after initial online request) have not been timely, not at all. As time goes by it makes customers more nervous about getting their money back even if it's in a form of a credit.

 

Furthermore, over the past few days RCL send out a whole bunch of email notices to customers advising them that their credit requests have been processed and are now available to be applied to future bookings. However, for many these FCC are nowhere close to the previously expected 125% amounts. In fact many report that FCC don't even come close to the amounts that were actually paid and can be verified by credit card charges.

 

For example, I received CAD$647 FCC for this May twelve-nights sailing in Mediterranean. That's for two people, and which was fully paid by me in December. If RCL wants to imply that I paid $647 / 1.25 / 2 = CAD$258.80 = ~USD$185 per person for a twelve-night Venice cruise then I'd like to buy a few dozens of these for all my friends and family.

 

So far RCL short-handed many of their customers, many of their employees some of whom went on a hunger strike (https://www.miamiherald.com/news/business/tourism-cruises/article242595896.html), and plenty of investors by not being exactly transparent about the quality of their future bookings.

 

I wonder how many investors actually realize that many of 2021 bookings are simply a transfer of old 2020 bookings without any new money flowing in? How many investors are aware of the fact that rebooking for 2021 was the only option for those who originally booked with non-refundable deposits?

There are also cases where future cruises were booked with new money simply because there's an outstanding promise by RCL and TA to replace those new money with FCC once those FCC funds become available. For example, my FCC was not available when we decided to move our May sailing to September. In order to reserve a spot I had to make a new booking with a fully-refundable deposit. The understanding with my TA is that once FCC became available (it was promised to happen before end of April) my money would be refunded and replaced with FCC. This hasn't happened yet. So just using my own case I can say that RCL books are not yet fully consolidated, and whatever financial position they report now doesn't actually reflect the true state of of their financial affairs.

Given this situation I think it would be reckless to consider RCL a viable investment. I believe the stock valuation at these levels continues to be way too optimistic.

P.S. I originally wrote this message earlier in the week but never posted it. Since then RCL dropped a bit more. I also got an additional FCC in the amount of $53.  That means that RCL now owes me _only_ $2,800.

[PatMunits]

In the news: Canada Pension Plan (the official government body of Canada that manages our tax dollars for the federal pension) last year bought over a billion dollars worth of RCL stock at $133/share. https://business.financialpost.com/investing/cppib-down-1b-on-ill-timed-royal-caribbean-cruises-investment-filings-suggest

If anything, I certainly now feel much better in my own amateur ability to evaluate the worthiness of RCL stock.

[NJ&Ozzie]

3 hours ago, PatMunits said:

In the news: Canada Pension Plan (the official government body of Canada that manages our tax dollars for the federal pension) last year bought over a billion dollars worth of RCL stock at $133/share. https://business.financialpost.com/investing/cppib-down-1b-on-ill-timed-royal-caribbean-cruises-investment-filings-suggest

If anything, I certainly now feel much better in my own amateur ability to evaluate the worthiness of RCL stock.

Unbelievable.

NJ

[Hoopster95]

4 hours ago, PatMunits said:

In the news: Canada Pension Plan (the official government body of Canada that manages our tax dollars for the federal pension) last year bought over a billion dollars worth of RCL stock at $133/share. https://business.financialpost.com/investing/cppib-down-1b-on-ill-timed-royal-caribbean-cruises-investment-filings-suggest

 

1 hour ago, NJ&Ozzie said:

Unbelievable.

NJ

 

Not a one-time occurrence. NorTel and Bre-X comes to mind.

[Denverdonkeys]

9 hours ago, Jimbo said:

Happen with me on ameritrade, might have been the type of stock I bought though, It was a drug company.

it might have been because you were using unsettled funds to buy stock and then selling before those funds settled. you need to only wait 30 days on losses so you avoid a wash sale. the company you are buying does not matter if you are buying stocks (and not options, which i dont know much about).

[yogimax]

6 hours ago, PatMunits said:

In the news: Canada Pension Plan (the official government body of Canada that manages our tax dollars for the federal pension) last year bought over a billion dollars worth of RCL stock at $133/share.

Many individuals bought RCL at over $100/share.  They have pain and suffering.  That's why I dislike that some use this forum to "boast and brag" about their good fortune (luck) with RCL stock!

Edited May 15, 2020 by yogimax