Carnival Corporation has reported a net loss of $2.1 billion for the second quarter of 2021, despite booking volumes soaring by 45% in the past three months compared to the first quarter.
The world’s largest cruise company ended the second quarter with $9.3 billion cash and chief financial officer David Bernstein said: “We believe we have sufficient liquidity to get us back to full operations.”
In the first half of 2021, the parent comany of brands such as P&O Cruises, Cunard and Princess Cruises, reported a monthly cash burn rate of $500 which was better than forecasted partly due to earnings generated from ship sales.
Booking volumes for all future cruises were 45% higher in the second quarter of the year than during the opening three months of 2021.
As of May 31, advanced bookings for next year are ahead of “a very strong 2019” at the same point, said the company as it announced its latest financial results.
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Speaking on a results call, Bernstein said: “We’re seeing strong bookings on both sides of the pond as things continue to rebound.”
Customer deposits have also jumped $300 from quarter one ($2.2 billion) to quarter two ($2.5 billion) and the company reported that monies put down by customers ahead of their cruise departure “exceeded the impact of refunds provided”.
President and chief executive Arnold Donald (pictured) said the company had experienced “an acceleration” in booking trends globally, particularly for recently announced sailings this summer.
He added: “This strong demand affirms confidence in our future. In addition, customer deposits grew this past quarter, a significant milestone on our path to resumption.”
Currently, 42 ships – more than half of the entire company’s fleet – across eight Carnival brands have restarted or are scheduled to resume operations by November 30. Carnival Corporation hopes to have all 95 ships back sailing early next year.
The company has five ships in operation at the moment.
Donald added: “We are working aggressively on our path to return our full fleet to operations by next spring. So far, we have announced that 42 ships, representing over half of our capacity, have been scheduled to return to serving guests by this fiscal year end.
“We are currently evaluating various deployment options with a focus on maximising cash flow, while delivering a great guest experience and serving the best interests of public health.”
Speaking on the second quarter results call, Donald added: “Things are moving in a positive direction. It is probably going to be a little bit choppy for the rest of 2021 and early 2022 as there will be a transition period.
“In 2022 and beyond, hopefully we will be able to sail at full occupancy. We believe we have liquidity in place to get us back to full sailing of the fleet. Cash generation is the way that we are going to reaccelerate debt repayment and that is the path that we’re on.”
Carnival Corporation predicts it will hit a growth rate of 2.5% before 2025. The company’s growth rate was 4.5% before the Covid-19 pandemic.
“That is a much lower growth rate but again pent-up demand because people have spent a lot of time in lockdown is going to last a while,” Donald added. “It’s hard to predict the future but we’re logically optimistic that there’ll be a good environment for many years to come.”
The company expects to report a loss at the end of the next quarter and for the full year ending on November 30, 2021.