Investors are starting to get a clearer picture of the coronavirus pandemic's impact on Royal Caribbean's (RCL +7.34%) business. The cruise ship giant, whose global fleet has been out of operation since mid-March, announced preliminary first-quarter results on Wednesday that included some key financial updates.
Sales fell 17% for the three-month period that ended on March 31, the company said, and net losses landed at $1.4 billion compared to $250 million of profits a year ago. Royal Caribbean attributed $453 million of that decline directly to the COVID-19 pandemic. The fleet cancellations triggered related impairment charges that could be as high as $1.3 billion by the time the earnings results are finalized.
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Royal Caribbean affirmed its prior updates that cited steady ticketing demand for 2021 even as volumes dive in 2020. The company also confirmed that it is burning through between $250 million and $275 million each month while its ships remain docked. Management has added over $4 billion to the balance sheet through new debt since the crisis hit, however, and the company isn't in immediate danger of violating any agreements with creditors.
Investors will get more details on the financial health of the business when Royal Caribbean files its official first-quarter results, which should occur sometime before May 31.
