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heidikay

By heidikay,
in Royal Caribbean International

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atricks

atricks

Posted
Posted

Maybe this

https://www.rclinvestor.com/press-releases/release/?id=1462

MIAMI, March 10, 2020 /PRNewswire/ -- Royal Caribbean Cruises Ltd (NYSE: RCL) today announced that due to the spread and recent developments related to the COVID-19 outbreak, the company has increased its revolving credit capacity by $550 million bolstering the company's liquidity.  The company is pursuing additional actions to improve its liquidity by reducing capital expenditures, operating expenses and taking other actions to improve liquidity by at least a further $1.7 billion in 2020.  The company is also planning reductions to the 2021 capital expenditures and operating expenses.

The company had previously communicated that its 2020 guidance did not include the impact of the COVID-19 outbreak.  Given the recent government actions and the heightened impact and uncertainty of changes in the magnitude, duration and geographic reach of COVID-19, the company is withdrawing its first quarter and full-year 2020 guidance.

"These are extraordinary times and we are taking these steps to manage the company prudently and conservatively," said Richard D. Fain, chairman and CEO.  "I am proud of the work our teams are doing to address this unprecedented situation." 

(more on the link)

 

 

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MADflyer

MADflyer

Posted
Posted
10 minutes ago, atricks said:

  The company is pursuing additional actions to improve its liquidity by reducing capital expenditures, operating expenses and taking other actions to improve liquidity by at least a further $1.7 billion in 2020.  The company is also planning reductions to the 2021 capital expenditures and operating expenses.

 

 

 

With a reduction of $1.7 billion in capital expenditures, might that mean that planned 'Royal Amplified' refurbishments might be postponed? They obviously can not cut Odyssey and Wonder, so would that not just leave planned refurbishments to cut? 

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Biker19

Biker19

Posted
Posted
2 minutes ago, MADflyer said:

They obviously can not cut Odyssey and Wonder, so would that not just leave planned refurbishments to cut? 

I think Liberty is the only real Amp left, the other major capital expenditure is all the land developments planned - those could get cut.

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MADflyer

MADflyer

Posted
Posted
Just now, Biker19 said:

I think Liberty is the only real Amp left, the other major capital expenditure is all the land developments planned - those could get cut.

They plan to cut 2021 as well. so I guess Liberty and Adventure could be affected by the cuts. It will be interesting to see what operational expenses they can reduce and how that might affect deployment. 

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Forcemark

Forcemark

Posted
Posted

https://www.bloomberg.com/news/articles/2020-03-10/royal-caribbean-may-be-cut-to-junk-by-s-p-on-virus-travel-impact

 

"Royal Caribbean may be cut to junk, while Carnival would join the lowest tier of investment grade."

 

"S&P’s action takes Royal Caribbean one step closer to becoming a fallen angel. With two speculative-grade ratings, its $1.5 billion of debt would leave the Bloomberg Barclays investment-grade index. Carnival is rated A3 by Moody’s, equivalent to S&P’s A- rating."

 

I hope RCL is considered too big to fail, I really would like to cruise on the Serenade again.

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ltlslick1

ltlslick1

Posted
Posted

Here’s one opinion of it:https://www.google.com/amp/s/seekingalpha.com/amp/news/3550124-nomura-sees-cruise-line-recovery-in-2021

 

Stock will continue to door poorly as virus information is released. Where it bottoms is anyone’s guess. I am averaging in. Long term this becomes a very profitable company again in my eyes. 

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The Grumpus

The Grumpus

Posted
Posted
1 hour ago, MADflyer said:

They plan to cut 2021 as well. so I guess Liberty and Adventure could be affected by the cuts. It will be interesting to see what operational expenses they can reduce and how that might affect deployment. 

Assuming they don't get shut down in the U.S over next few months, I would guess maybe less crew, less supplies offered aboard (i.e. food & drinks choices), less general maintenance, and possibly adjust itineraries to minimize fuel & operating costs of the ship itself.

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PatMunits

PatMunits

Posted
Posted
1 hour ago, Forcemark said:

"Royal Caribbean may be cut to junk, while Carnival would join the lowest tier of investment grade."

 

This credit-worthiness downgrade will have material negative impact on the stock price. Numerous mutual funds are not permitted to hold securities below specific investment grade level. The fund managers may believe that RCL presents a lucrative investment opportunity at current price but with the downgrade they will be forced to sell their RCL holdings. This means there will be further negative pressure on the price, and consequently it means that now is not time to buy if all other things remain the same.

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NateUpNorth

NateUpNorth

Posted
Posted (edited)
1 hour ago, PatMunits said:

 

This credit-worthiness downgrade will have material negative impact on the stock price. Numerous mutual funds are not permitted to hold securities below specific investment grade level. The fund managers may believe that RCL presents a lucrative investment opportunity at current price but with the downgrade they will be forced to sell their RCL holdings. This means there will be further negative pressure on the price, and consequently it means that now is not time to buy if all other things remain the same.

 

So you're saying for every fund manager constrained by investment grade rating there isn't an offsetting value manager filling his boots right now?

Edited by NateUpNorth
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Goodtime Cruizin

Goodtime Cruizin

Posted
Posted

Of course the creditors will work w them!  A cruise ship isn’t like a car, house, condo, or even a hotel. A bank just can’t flip a cruise ship. The creditors are going to ride out the storm as well. RCL might be struggling but it isn’t due to mismanagement. They’ll be fine in the long run. 

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ed01106

ed01106

Posted
Posted
1 hour ago, NateUpNorth said:

 

So you're saying for every fund manager constrained by investment grade rating there isn't an offsetting value manager filling his boots right now?

You can find bond managers that will buy junk bonds, but they demand a much higher interest rate than higher grade bonds.  Higher interest rates mean more cost, thus lower earnings and cash flow.  This can result in a downward spiral.

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taglovestocruise

taglovestocruise

Posted
Posted
6 hours ago, MADflyer said:

With a reduction of $1.7 billion in capital expenditures, might that mean that planned 'Royal Amplified' refurbishments might be postponed? They obviously can not cut Odyssey and Wonder, so would that not just leave planned refurbishments to cut? 

Allure goes in next week, 125 million +, in dry dock for 58 days.  Bought stock yesterday at 48.75, if trump calls a temp end to cruises I will double down.  Also picked up some carnival at 21.88 yesterday. 

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Baron Barracuda

Baron Barracuda

Posted
Posted
5 hours ago, PatMunits said:

 

This credit-worthiness downgrade will have material negative impact on the stock price. Numerous mutual funds are not permitted to hold securities below specific investment grade level. The fund managers may believe that RCL presents a lucrative investment opportunity at current price but with the downgrade they will be forced to sell their RCL holdings. This means there will be further negative pressure on the price, and consequently it means that now is not time to buy if all other things remain the same.

Presume you are talking about bond fund managers having to sell.  Not typically an issue for equity funds.  If it was they couldn't hold high flyers like Tesla and Netflix.

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NateUpNorth

NateUpNorth

Posted
Posted
13 hours ago, Baron Barracuda said:

Presume you are talking about bond fund managers having to sell.  Not typically an issue for equity funds.  If it was they couldn't hold high flyers like Tesla and Netflix.

 

I think you're correct. If I'm invested with a "value manager" I'd be expecting him/her to be spending like a drunken sailor right now.

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