Royal Caribbean says it has sold its luxury brand Azamara, in part, to focus on the Celebrity Cruises brand, among others. Here, Celebrity Silhouette is seen anchored in Miami on a recent day.
Daniel Slim / AFP via Getty Images
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Royal Caribbean Group
it sells its Azamara brand with three ships to a private equity firm for about $ 200 million.
In a press release on Tuesday,
Royal Caribbean
Group (ticker: RCL) said the deal allows it to focus on expanding its Royal Caribbean International, Celebrity Cruises and Silversea brands.
The stock was around $ 74 and changed around noon on Tuesday, up more than 1% on trading that day and ahead of the S&P 500 gain of about 0.6%.
JPMorgan analyst Brandt Montour described Azamara in a research note on Tuesday as “a state-of-the-art brand focused on more exotic / captivating itineraries.” He also noted that the transaction makes sense “given [that] Azamara’s fleet is likely to burn money in the near future and we believe that RCL has seen this as a non-core brand with no serious plans to develop it significantly for the foreseeable future. ”
Royal Caribbean will record a one-time non-cash depreciation tax of $ 170 million, although it added that it does not expect the sale to “have a significant impact” on future financial results.
Royal Caribbean has been largely closed for almost a year due to the pandemic.
While their ships remain idle, Royal and his colleagues have burned hundreds of millions of dollars every month. They raised billions of dollars in capital to value them, but they also focused on reducing costs.
E.g,
Carnival (CCL),
the largest cruise company, said last week it was removing 19 ships from its fleet.
Of the three major US cruise operators, Royal is the second largest, followed by
Norwegian Cruise Line Holdings
(NCLH).
Separately, the Norwegian said on Tuesday that he had extended the suspension of all cruises with boarding dates until April 30.
Write to Lawrence C. Strauss at [email protected]