Royal Caribbean Cruises Ltd. Announces Discontinuation of Dividend
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Royal Caribbean Cruises Ltd. Announces Discontinuation of Dividend
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2008-11-19
The Board of Directors of Royal Caribbean Cruises Ltd. (NYSE: RCL; Oslo), as a result of its quarterly review of dividend policy, decided today to discontinue the company's common stock dividend.
"We recognize our dividend is important to many of our shareholders," said Richard D. Fain, chairman and chief executive officer. "However, the best way to reward all of our shareholders is to continue to position the company for future earnings growth and enhance our liquidity during this period of heightened economic and financial market volatility."
"As we have described previously, Royal Caribbean has been proactive in arranging financing commitments or government guarantees for all of its remaining ship orders," Fain continued. "We expect these financing arrangements will be adequate to meet our ongoing operations and capital expenditure requirements. Nonetheless, in the current economic and capital markets environment, we feel it is prudent to actively manage our liquidity profile and add to our financial flexibility."
The company has been aggressive in the last several months in taking actions to improve both its profitability and liquidity including reductions in running costs, general and administrative expenses and capital expenditures. Discontinuing the dividend is a natural corollary to these ongoing efforts.
This is the time of year that the Board of Directors normally considers fourth quarter dividends. The quarterly dividends have recently been at a rate of $0.15 per share, totaling approximately $130 million per year. The cost savings previously announced are estimated to save the company approximately $125 million per year. The company continues to focus on savings opportunities and will continue to assess its liquidity position as the global economy and financial markets begin to stabilize.
Three weeks ago, the company provided information about current booking patterns and future trends. While the economic outlook continues to evolve, the general booking patterns have not changed and the company reaffirms the guidance it then provided.
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