Carnival Corporation expects an extended wave season and predicts it will make a profit by the third quarter, as it announced its first quarter results today.
The world’s largest cruise company highlighted the ‘material impact’ of the conflict in Ukraine and fuel prices but said bookings for its cruise ships continue to improve.
Announcing first-quarter financial results, president and chief executive Arnold Donald said: “Given the recent strengthening in booking volumes coupled with the closer-in booking patterns, we expect an extended wave season.”
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Carnival Corp boss reports ‘strong’ bookings ‘despite Omicron
Since the middle of January, the company has seen an improving trend in weekly booking volumes, and recent weekly booking volumes have been higher than at any point since the restart of cruises.
It did see some impact on bookings for near-term departures as a result of the Omicron variant of Covid, including higher cancellations resulting from an increase in pre-travel positive test results.
“Therefore, occupancy in the first quarter of 2022 was 54%, a 20% increase in guests carried over the prior quarter,” said Carnival.
The cruise giant reported an adjusted net loss of $1.9 billion for the first quarter of 2022, compared to $2.6 billion for the fourth quarter of 2021 and $2 billion for the same quarter last year.
However, it said the ongoing resumption cruises and the increased uncertainty “given the current invasion of Ukraine, including its effect on the price of fuel” are collectively having a material impact on its business.
The company continues to expect a net loss for the second quarter of 2022 and a profit for the third quarter of 2022. For the full year 2022, the company expects a net loss.
It said revenue per passenger cruise day (PCD) for the first quarter of 2022 increased by about 7.5% compared to a “strong” 2019.
This increase was driven by “exceptionally strong onboard and other revenue”, it explained.
The Q1 update said 75% of the company’s capacity had resumed guest cruise operations by March 22 and the company expects to have each brand’s full fleet operating again for its respective summer season.
The company believes monthly adjusted Ebitda (earnings before interest, taxes, depreciation, and amortisation) will turn positive at the beginning of its summer season.
Donald said: “Despite the impact of Omicron, guests carried grew by nearly 20% in the first quarter compared to the prior quarter, while simultaneously increasing revenue per passenger cruise day and driving an improvement in adjusted Ebitda.
“We expect monthly adjusted Ebitda to turn positive by the beginning of our summer season as we build occupancy and return more ships to service.”
The company took delivery of three larger, more efficient ships during the quarter – Costa Toscana, Aidacosma and Discovery Princess – and announced the removal of another three smaller, less efficient ships.