Corp has reported a US GAAP net loss of $2.1 bill and an adjusted net loss of $2 bill for the second quarter of 2021.
At the end of 2Q21, the group had $9.3 bill of cash and short-term investments, which the company believed was sufficient liquidity to return to full cruise operations.
Customer deposits increased in the quarter, compared to the previous quarter.
Cash burn rate in the first half of 2021 was better than forecast primarily due to the timing of proceeds from ship sales and working capital changes.
Some 42 ships from eight of the company’s nine brands either have resumed or are announced to resume guest cruise operations by 30th November, 2021, which is over 50% of the company’s capacity, with more announcements expected in the coming weeks.
Booking volumes for all future cruises during 2Q21 were 45% higher than booking volumes during the previous quarter.
Cumulative advanced bookings for next year are ahead of a very strong 2019, despite minimal advertising or marketing.
Building on a legacy of ESG performance, the company announced its 2030 sustainability goals and 2050 sustainability aspirations, focusing strategically and holistically on enhancing its sustainable business model while reinforcing its commitment to and investment in sustainability solutions (see separate story).
During the quarter, Carnival repriced its first-priority senior secured term loan facility, reducing its future annual interest expense by over $120 mill per year and has approval in principle from the relevant export credit agencies to defer around $1 bill of principal payments, increasing its near term liquidity.
These transactions are expected to close during the third quarter of this year and the group continued to focus on pursuing additional refinancing opportunities to reduce interest rates and extend maturities.
Carnival Corp President and CEO, Arnold Donald, said, “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,” he said.
More return to service announcements will be made in the weeks ahead.
The company claimed to be in a unique position for its phased resumption in cruise travel given its multiple brands, which are being restarted independently and tailored to the environment of their respective source market.
Eight of the company’s nine brands either have resumed or have announced they plan to resume guest cruise operations by the company’s fiscal year end, 30th November, 2021.
Some 27 ships, or about 35% of capacity, have resumed or are have been announced to resume by the end of the third quarter and an additional 15 ships, or nearly 20% of capacity, are to resume by the end of the fourth quarter of 2021.
Carnival said that it planned to have its full fleet back in operation in the spring of 2022.
Donald added, “Despite our minimal advertising spend, we continue to experience an acceleration in booking trends globally, including capturing significant latent demand for our new sailings this summer.
“This strong demand affirms confidence in our future. In addition, customer deposits grew this past quarter, a significant milestone on our path to resumption.
“With the aggressive actions we have already taken to optimise our portfolio and reduce capacity, we believe we are well positioned to capitalise on pent up demand and to emerge a leaner more efficient company, reinforcing our global industry leading position,” he stressed.
Total customer deposits as of 31st May, 2021 and 28th February, 2021 were $2.5 bill and $2.2 bill, respectively. During the quarter, customer deposits on new bookings exceeded the impact of refunds provided.
Carnival Corp’s CFO, David Bernstein explained, “We ended the second quarter with $9.3 bill of cash and short-term investments. 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.
“To date, through our refinancing efforts, we have reduced our future annual interest expense by over $120 mill per year and expect to increase our near-term liquidity by $1 bill,” he said.
Donald added, “Once we return to full operations, our cash flow will be the primary driver of the company’s return to investment grade credit over time, creating greater shareholder value.”
Carnival’s monthly average cash burn rate for the first half of this year was $500 mill, which was better than forecast, primarily due to the timing of proceeds from ship sales and working capital changes.
The company also advised that it expected a net loss on both a US GAAP and adjusted basis for the third quarter and the full year ending 30th November, 2021.
