March 10, 2020 / 1:07 PM / 3 months ago

Royal Caribbean withdraws 2020 forecast, boosts liquidity amid coronavirus fears

FILE PHOTO: The Royal Caribbean cruise ship Anthem of the Seas is docked after passengers were removed with possible coronavirus symptoms at the port of Bayonne, New Jersey, U.S., February 7, 2020. REUTERS/Bryan R Smith

(Reuters) - Royal Caribbean Cruises Ltd (RCL.N) on Tuesday withdrew its first-quarter and full-year forecast, and increased its credit capacity by $550 million to boost liquidity amid concerns around the rapid spreading of coronavirus.

Cruise operators are among the worst hit by the epidemic, which originated in mainland China and has killed more than 3,800 people, as travel restrictions and fears of the virus spreading have led to cancellations of trips.

Royal Caribbean said it would cut spending, operating expenses and take other actions to improve liquidity by at least another $1.7 billion in 2020.

“These are extraordinary times and we are taking these steps to manage the company prudently and conservatively,” Chief Executive Officer Richard Fain said.

Shares of the company, which have lost nearly 64% of the their value so this year, were up about 6% before the bell.

Grand Princess, the ocean liner owned by rival Carnival Corp (CCL.N), was docked off its destination on Monday and its passengers are quarantined for two weeks after 21 people aboard it were tested positive for coronavirus, which causes the respiratory disease known as COVID-19.

More than 113,000 infections in over 100 countries have been reported, with vast majority in mainland China. A U.S. health official asked Americans earlier this week to avoid cruises altogether during the crisis.

Earlier in the day, leading U.S. airlines American (AAL.O) and Delta (DAL.N) suspended 2020 financial guidance and took drastic further measures to combat the impact of the epidemic.

Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli

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