GB crane accident cost Royal Caribbean more than $35 million

The incident at the Grand Bahama Shipyard last April in which a crane collapsed onto Royal Caribbean Cruises’s Oasis of the Seas cruise ship, cost the company more than $35 million, a number that did not affect the company’s 2019 record, $1.9 billion net income, according to its 2019 financials.

The financials, which it posted to its website on Tuesday, revealed that the Grand Bahama Shipyard incident cost Royal Caribbean $20.7 million in write-offs and expenses on the dry-dock side; and $14.5 million on repairs to the Oasis.

But that unfortunate and costly event, along with Hurricane Dorian disruptions and the closure of Cuba to U.S. cruise traffic, did not stop the cruise line’s earnings throughout the year.

“U.S. GAAP (generally accepted accounting principles) net income for the year was $1.9 billion or $8.95 per share and adjusted net income was $2.0 billion or $9.54 per share,” the financial statements reveal.

“This result was achieved despite a series of extraordinary events including the dry-dock incident in the Grand Bahama shipyard, the cancellation of the cruises to Cuba and an unusual hurricane season, all of which negatively impacted the company’s results for the year.

“Adjusted net income represents net income less net income attributable to non-controlling interest excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included costs net of insurance recoveries related to the Grand Bahama dry-dock structure incident involving Oasis of the Seas; and our equity share of the write-off of the Grand Bahama dry-dock and other incidental expenses by Grand Bahama.”

According to the cruise line, its newly-opened Perfect Day at Coco Cay development in the Berry Islands contributed to its strong 2019 performance.

Royal Caribbean is already forecasting a strong 2020 year, “with overall rates higher than the same time last year and booked load factors ahead of the same time last year on a like-for-like basis”.

The company also expects the delivery of new ships this year.

“The company is very encouraged about the demand environment for 2020. Demand for the core products is very strong across all quarters. Recent geopolitical events such as the bushfires in Australia and unrest in the Middle East have impacted demand for certain itineraries, but the strength of the core products has more than compensated.

“The company expects a net yield increase in the range of 2.25 percent to 4.25 percent in constant currency and 2.5 percent to 4.5 percent as reported for the full year.

“The company is very excited about the introduction of four new ships during 2020. These new ships will be important contributors to the yield growth and profitability. The timing of the new ship deliveries will result in a more significant yield growth in the second half of the year than in the first half.”

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Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

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