Miami-based cruise major Royal Caribbean Cruises wrapped up 2018 with record financial results despite the unfavorable impact from fuel and currency.
US GAAP net income for the year was USD 1.8 billion or USD 8.56 per share and adjusted net income was USD 1.9 billion or USD 8.86 per share versus US GAAP and adjusted net income of USD 1.6 billion or USD 7.53 per share in 2017.
This result equates to a 17.5% year-over-year growth in adjusted earnings per share, according to the company. This was achieved despite the impact of currency and fuel which negatively affected earnings by around USD 123 million.
As informed, strong demand for Royal Caribbean’s core products, better onboard revenues and the consolidation from Silversea’s operations drove the year-over-year earnings increase. In July 2018, Royal Caribbean finalized the acquisition of a two-thirds stake in Silversea.
“This year our teams achieved record financial results while introducing four new vessels, acquiring Silversea Cruises, inaugurating two stunning cruise terminals and implementing Excalibur on about half of our fleet,” Richard D. Fain, chairman and CEO, commented.
“By any measure 2018 was a particularly stellar year, and the strong Wave makes us optimistic about 2019 as well,” Fain added.
In the fourth quarter of 2018, US GAAP net income stood at USD 315.7 million and adjusted net income was USD 322.1 million, compared to US GAAP and adjusted net income of USD 288 million seen in the corresponding period of 2017.
For 2019, the company expects full-year adjusted earnings to be in the range of USD 9.75 to USD 10.00 per share. Royal Caribbean said its booked position for 2019 is better than last year’s record high and at higher rates, with the demand being strong across all quarters.
Moreover, the company expects a net yield increase in the range of 6.5% to 8.5% in Constant-Currency and 6.0% to 8.0% As-Reported for the full year. These metrics include approximately 350 basis points from the operation of Silversea, the new cruise terminal in Miami and the Perfect Day development.
“Our yield outlook for 2019 is very encouraging,” Jason T. Liberty, executive vice president and CFO, said.
“Demand for our brands continues to accelerate and we are well positioned for another year of double-digit growth in our earnings per share,” Liberty concluded.
Royal Caribbean plans to introduce Celebrity Flora, the first ship designed for the Galapagos, in May 2019 and Spectrum of the Seas in the China market in June 2019. These new ships will also be contributors to 2019 yield growth, the cruise company believes.
Royal Caribbean Cruises controls and operates four brands — Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and Silversea Cruises. It is also a 50% joint venture owner of the German brand TUI Cruises and a 49% shareholder in the Spanish brand Pullmantur Cruceros.
Together, these brands operate a combined total of 60 ships with an additional 16 on order as of December 31, 2018.