Royal Caribbean plunges to $1.6bn loss in third quarter

Royal Caribbean plunged to a worse-than-expected $1.6bn (£1.2bn) second-quarter loss after the Covid-19 crisis forced it to cancel all sailings in the period.

The US company swung to a net loss in the three months to the end of June from a $472.8m profit a year earlier as it burned through up to $290m a month while its ships were suspended. Royal Caribbean, which has dropped "cruises" from its company name, said it expected a further loss in the third quarter.

Royal Caribbean lost $6.13 per share on an adjusted basis, worse than analysts' average forecast for a loss of $4.82 per share, according to Refinitiv IBES.

The company said: "The net loss for the quarter is a result of the impact of the Covid-19 pandemic on the business. The magnitude, duration and speed of Covid-19 remains uncertain. As a consequence, the company cannot estimate the impact of Covid-19 on its business, financial condition or near or longer-term financial or operational results with reasonable certainty."

"Notwithstanding the foregoing, the company expects to incur a net loss on both a US GAAP and adjusted basis for its third quarter and the 2020 fiscal year, the extent of which will depend on the timing and extent of the return to service."

The cruise industry has shut down cruise operators' fleets, forcing companies to raise vast sums of cash to survive. The crisis has cast doubt on the industry's future after ships became floating incubators for the virus, potentially scaring off customers who are disproportionately old and vulnerable to infection.

Like its rival Carnival, Royal Caribbean has raised billions of dollars secured on its fleet of ships to strengthen its finances during the crisis. The company said it had about $4.1bn of cash and cash equivalents at the end of June.