The ongoing impact of coronavirus will have a “material negative” impact on the world’s largest cruise company.
Carnival Corporation today reported a halving of adjusted first quarter net income to $150 million in the three months to February 29 from $338 million in the same period last year.
But this excluded net charges of $932 million in the period with a forecast dive into the red for full financial year ending in November.
“The impact of Covid-19 on the first quarter 2020 net loss is approximately $0.23 per share, which includes cancelled voyages and other voyage disruptions, and excludes the impairment charges described above,” the company said.
“Other previously disclosed voyage disruptions, noted during the corporation’s December earnings conference call, also impacted first quarter 2020 results by approximately $0.12 per share.”
The group previously announced a temporary pause of its global fleet operations across all brands.
Carnival said: “The corporation believes the ongoing effects of Covid-19 on its operations and global bookings will have a material negative impact on its financial results and liquidity.
“The corporation also believes the effects of Covid-19 on the shipyards where its ships are under construction, will result in a delay in ship deliveries.
“The corporation is taking additional actions to improve its liquidity, including capital expenditure and expense reductions, and pursuing additional financing.
“Given the uncertainty of the situation, the corporation is currently unable to provide an earnings forecast, however it expects a net loss for the fiscal year ending November 30, 2020.”
Cumulative advance bookings for the remainder of 2020 at March 15 are “meaningfully lower” year-on-year at prices that are “considerably lower” on a comparable basis, reflecting the impact of Covid-19, the organisation added.
This followed booking volumes running “slightly higher” between mid-December and March 1.
The company added: “Also for the first half of 2021 and during the two weeks ended March 15, the corporation booked 546,000 occupied lower berth days, albeit considerably behind the prior year pace.
“As of March 15, 2020, cumulative advanced bookings for the first half of 2021, are slightly lower than the prior year.
“Wave season started strong with booking volumes for the three weeks ending January 26, 2020, running higher than the prior year for the remaining three quarters of the year on a comparable basis.
“For the seven week period beginning January 26, 2020 and ending March 15, 2020, booking volumes for the remainder of the year were meaningfully behind the prior year on a comparable basis as a result of the effects of Covid-19.”
The company drew down $3 billion in credit last week.
The corporation borrowed “in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the Covid-19 outbreak.
“Substantially all of the corporation’s assets, with the exception of certain ships with a net book value of approximately $6 billion as of February 29, 2020, are currently available to be pledged as collateral.”
The corporation had a total of $11.7 billion of liquidity as of February 29.
“This included $3 billion of immediate liquidity plus $2.8 billion from four committed export credit facilities that are available to fund the originally planned ship deliveries for the remainder of this year and $5.9 billion from committed export credit facilities that are available to fund ship deliveries originally planned in 2021 and beyond,” the company said.