Carnival Corporation has reported a net loss of $2.8 billion for the third quarter, despite voyages for the past three months being cash flow positive and high forward booking levels.
The world’s largest cruise company ended the third quarter with $7.8 billion of liquidity, which it believes is sufficient to return to full cruise operations.
Of the nine Carnival Corp brands, eight have resumed passenger operations and the company expects to have more than 50% of its fleet capacity back operating by end of next month.
Bookings for the second half of 2022 are currently ahead of 2019, Carnival said. However, it said forward bookings during the third quarter of 2021 were not as “robust” as in the second quarter of 2021.
The company blamed low consumer confidence in the US last month as a result of “heightened uncertainty around the Delta variant”.
President and chief executive Arnold Donald said: “Our booked position for the second half of 2022 is at a new historical high, including our seasonally strong third quarter with all our ships planned to be in operation, despite reduced marketing spending.
“The broader environment for travel, while choppy, has improved dramatically since last summer. We believe it should improve even further by next summer if the current trend of vaccine roll-outs and advancements in therapies continues.
“We have also opened bookings for further out cruises in 2023, with unprecedented early demand.”
Customer deposits during the quarter generated $630 million, increasing the total from $2.5 billion to $3.1 billion at the end of the third quarter.
Carnival reported that its monthly average cash burn rate for the third quarter of 2021 was $510 million.
This figure was in line with the $500 million monthly average cash burn rate for the first half of 2021 and better than the previous guidance, Carnival said.
Donald said: “Even at this early stage with intentionally constrained occupancy levels, our voyages are already cash flow positive.
“It is difficult to demonstrate just how successful our restart effort has been because many cruises, while generating positive cash flow, were limited to scenic cruises without ports of call, and generally priced well below the attractive destination-rich cruises we normally offer.”
He said that Carnival Cruise Line achieved 20% higher revenue per sailing day in July than in 2019. The line offered Caribbean and Alaska sailings during the month.
“Even with the unusually short booking window and capacity limitations, [Carnival Cruise Line] achieved occupancy of approximately 70%, which speaks to the strong underlying demand for our core product,” Donald added.
Chief financial officer David Bernstein added that the company had cut future annual interest expenses by more than $250 million per year and paid off around $4 billion debt so far.
He said: “We ended the third quarter with $7.8 billion of liquidity. We believe we have sufficient liquidity to get us back to full operations and continue to be focused on pursuing refinancing opportunities to reduce interest rates and extend maturities.”