Royal Caribbean Cruises (RCC) has reported net income of $201.5 million, or $1.04 per share, on revenues of $835.2 million for the third quarter ended Sept. 30, 2000, compared to net income of $170.0 million, or $0.92 per share, on revenues of $734.5 million for the third quarter last year.
Richard Glasier, executive vice president and CFO, attributed the earnings to increased capacity and increased cost efficiencies.
For the nine-month period, RCC reported net income of $415.2 million, or $2.15 per share, on revenues of $2.2 billion this year, compared to net income of $345.5 million, or $1.88 per share, on revenues of $2.0 billion last year.
"We increased capacity by 18 percent in the third quarter, but essentially matched last year's prices," Glasier said. "Net revenues were less than one percent down.
"We improved the margins despite competitive pricing and rising fuel costs," Glasier noted, adding that additional income was generated by RCC's investment in First Choice.
For the fourth quarter, RCC expects a slight decline in yields, which it attributed to the introduction of new itineraries being offered out of Aruba and Port Canaveral, and the year-over-year comparison to the higher prices achieved for Millennium cruises last year.
Regarding the problems that Carnival Cruise Lines has experienced with the Azipod propulsion units, Glasier said that the units on the Voyager of the Seas and the Explorer of the Seas are different and that the company did not anticipate taking the ships out of service for repairs but expects to make modifications while the ships are sailing.
Looking forward, Glasier expects a strong pace of bookings for early 2001 although the pricing pressure still exists, he said. The yield for the first quarter is expected to be down compared to last year's first quarter. After the first quarter, however, RCC expects net yield to pick up.
In the core markets, Glasier said that the two brands, Royal Caribbean International and Celebrity Cruises, were booked at the same levels as last year at this time and that the company was in "excellent shape for the Caribbean."
Glasier said the company's new tour operation in Alaska, Royal Celebrity Tours, was having a positive impact on bookings. But since it is a start-up, it may have a slight operating loss in 2001, he added. Next year, RCC will see capacity increases of 14 percent in the first quarter, 30 percent in the second quarter, 20 percent in the third quarter and 18 percent in the fourth quarter, based on the Millennium and the Explorer of the Seas, plus RCI's new Radiance of the Seas and two ships for Celebrity next year, the Infinity and the Summit.