Carnival Corporation has reported a net loss of $2.6 billion for the fourth quarter, despite occupancy levels rising by 4%, increased onboard revenue and customer deposits bringing $360 million into the business.
The world’s largest cruise firm ended the quarter with around $9.4 billion of liquidity and said it had turned “cash flow positive” in November.
The company expects “consistently positive cash flow” in the second quarter of 2022.
Occupancy in the fourth quarter was 58% versus 54% in the third quarter of this year, with 61% of the company’s fleet capacity back operating with guests on board.
Arnold Donald, chief executive, said: “With over 60% of our capacity now in operation and the remainder planned by spring, we are well positioned for our seasonally strong summer period.”
He added occupancy levels were approaching 90% this month, saying this was “a testament to the fundamental strength in demand for our cruise product”.
More than 1.2 million passengers have sailed on 50 ships across the firm’s fleet since cruises restarted earlier this year. The company is scheduled to have all 94 ships across its nine brands back operating in June.
Revenue per passenger day increased by around 4% compared to the same quarter in 2019, which the firm described as “strong”.
For the third successive quarter, Carnival’s customer deposits increased with $360 million coming into the business during the past three months.
The company’s monthly average cash burn rate for the fourth quarter was $510 million, the same as in the third quarter, which it said was “better than expected”.
The monthly average cash burn rate includes revenue, operation costs, administrative expenses, interest expenses and working capital changes.
Donald said the group had experienced “some initial impact on near-term bookings” due to the Omicron variant, although this was difficult to measure.
“That said we have a solid book position and intentionally constrained capacity for the first half of 2022,” he added.
“With the existing demand and limited capacity, we remain focused on maintaining price. Bookings continue to build for the remainder of 2022 and well into 2023. And we are achieving those early bookings with strong demand. In fact, pricing on our book position for the back half of 2022 improved since last quarter, and that’s despite the Delta variant.
“The current environment, while choppy, has improved dramatically since last summer. And as the current trend of vaccine rollouts and advancements in therapies continues, it should improve even further by next summer.”
Donald insisted on an earnings call that “even before there were vaccines, we had effective protocols with sailings in Europe. So, we’re amongst the safest form of socialising and travel that there are.”
He said: “We enter the year with $9.4 billion of liquidity, essentially the same liquidity level as last year but with significantly improved cash flow generation ahead as ship operating cash flow and customer deposits continue to build.
“During 2021, we believe we have clearly maximised our return to service and strengthened our financial position to withstand potential volatility on our path to profitability.”
However, the company is forecasting cruise costs to be “significantly higher” without fuel next year than in 2019 and blamed the fact ships had been “in pause status for part of the year, restart related expenses, the cost of maintaining enhanced health and safety protocols and inflation”.
“We anticipate that most of these costs and expenses will end in 2022 and will not reoccur in fiscal 2023,” Carnival said.