Royal Caribbean Cruises Ltd (RCL)

Pretax margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before tax but after interest (EBT)	US$ in thousands	1,703,000	-2,177,540	-5,303,480	-5,806,250	1,886,630
Revenue	US$ in thousands	12,346,000	7,385,240	100,364	1,037,510	10,564,600
Pretax margin		13.79%	-29.49%	-5,284.25%	-559.63%	17.86%

December 31, 2023 calculation

Pretax margin = EBT ÷ Revenue
= $1,703,000K ÷ $12,346,000K
= 13.79%

Royal Caribbean Group's pretax margin has demonstrated significant fluctuations over the past five years. In 2019, the pretax margin stood at a healthy 17.42%, indicating a strong ability to generate profits before accounting for taxes. However, the pretax margin sharply declined in 2020 and 2021, plunging into negative territory at -261.46% and -343.35%, respectively. This suggests that the company incurred substantial losses in those years, perhaps due to the impact of the global pandemic on the cruise industry.

In 2022, Royal Caribbean Group's pretax margin further deteriorated to -24.39%, indicating ongoing challenges and financial strain. However, there was a notable improvement in 2023, with the pretax margin rebounding to 12.26%. While this suggests a return to profitability, it is essential to closely monitor future financial performance to assess the sustainability of this recovery and the company's ability to effectively manage its costs and revenues.