Carnival Corp’s third quarter net income was more than 60% higher than recorded in the previous year, at $1.7 bill, while adjusted net income outperformed its June guidance by $170 mill, the company claimed.
Third quarter revenues hit an all-time high of $7.9 bill, up $1 bill, compared to 3Q23. In addition, a record operating income of $2.2 bill exceeded 2023 levels by $554 mill.
As a result of strong demand and cost saving opportunities, Carnival raised its full year 2024 adjusted EBITDA guidance to around $6 bill, up by more than 40%, compared to 2023 and better than June guidance by nearly $200 mill.
The cumulative advanced booked position for full year 2025 is above the previous 2024 record with prices (in constant currency) also ahead of the previous year.
“We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led by high-margin, same-ship yield growth, driving a 26% improvement in unit operating income, the highest level we have reached in 15 years,” commented Carnival Corp’s CEO, Josh Weinstein (pictured).
“We are poised to deliver record operating performance for full year 2024, with adjusted EBITDA now expected to cross $6 bill and adjusted return on invested capital to be about 10.5%.
“Strong demand enabled us to increase our full year yield guidance for the third time this year and we improved our cost guidance driving more revenue to the bottom line.
“Looking forward, the momentum continues as our enhanced commercial execution drives demand well in excess of our capacity growth, leaving us well positioned with an even stronger base of business for 2025, a record start to 2026 and firmly on the path toward our SEA Change targets,” Weinstein added.
Cruise costs per available lower berth day (ALBD) increased 3.4%, compared to 2023. However, adjusted cruise costs excluding fuel per ALBD (in constant currency) fell and were significantly better than the June guidance, driven by cost saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items and the timing of expenses between the quarters.
Total customer deposits reached a third quarter record of $6.8 bill, surpassing the previous 3Q record of $6.3 bill, as of 31st August, 2023, despite lower capacity growth.
“With nearly half of 2025 booked and less inventory remaining for sale than the prior year, we are leveraging strong demand to achieve record ticket pricing (in constant currency).
“Our brands continue to deliver robust bookings momentum, with all our brands ahead on price for 2025 sailings, based on the success of their demand generation efforts along with the exciting offerings and unparalleled experiences we consistently provide our guests. Likewise, 2026 is off to an unprecedented start achieving record booking volumes in the last three months,” Weinstein said.
In 3Q24, booking volumes remained robust for 2025 sailings at higher prices (in constant currency), compared to the previous year.
For the full year 2024, the company expects:
- Net yields (in constant currency) up around 10.4%, compared to 2023, better than June guidance, based on continued strength in demand.
- Adjusted cruise costs, excluding fuel per ALBD (in constant currency) up about 3.5%, compared to 2023, around 1% better than the June guidance, driven by cost saving opportunities, accelerated easing of inflationary pressures and benefits from one-time items.
- Adjusted EBITDA of about $6 bill, up over 40%, compared to 2023 and better than June guidance by nearly $200 mill.
- Adjusted return on invested capital (ROIC) of around 10.5%, an improvement of about 5%, compared to 2023 and half a point better than June guidance.
For 4Q24, the company expects:
- Net yields (in constant currency) up around 5%, compared to particularly strong 2023 levels.
- Adjusted cruise costs, excluding fuel per ALBD (in constant currency) up about 8%, compared to 4Q23, due primarily to higher drydocking days and higher investment in advertising.
- Adjusted EBITDA of around $1.14 bill, up 20%, compared to 4Q23.
“We have continued to improve our leverage metrics and balance sheet with strong cash generation and continued debt reduction. We are pleased these efforts were recognised by both S&P and Moody’s with their recent credit rating upgrades.
“For 2024, we expect better than a two turn improvement in net debt to adjusted EBITDA, compared to 2023, approaching 4.5x, well on our way to investment grade. In fact, this year’s adjusted free cash flow1 is expected to be over $3 bill,” added Carnival Corp’s CFO, David Bernstein.
The company has continued its efforts to pro-actively manage its debt profile, it said. Since June, 2024, Carnival prepaid another $625 mill of debt, bringing its total prepayments to $7.3 bill since the beginning of 2023.
In addition, the company has now fully utilised the accordion feature of its revolving credit facility, increasing the borrowing capacity by nearly $500 mill and bringing the total undrawn commitment to $3 bill.
Carnival ended the quarter with $4.5 bill of liquidity, including cash and borrowings available under the revolving credit facility.
The company continued to direct new capacity towards its highest returning brand with the recent order of three more ships for Carnival Cruise Line (CCL) for delivery in 2029, 2031 and 2033.
These ships will become the largest ships in CCL’s fleet and will carry more passengers than any other cruise ship to date.
Carnival said it was following through on its measured capacity growth strategy of one to two ships per year on average, including just three ships scheduled for delivery through 2028.
This will enable the company to utilise its substantial free cash flow to improve its balance sheet by significantly reducing its leverage levels over the next several years, it said.
Carnival also obtained a new export credit facility, bringing its total committed financings related to ship deliveries to $3.4 bill, continuing its strategy to finance its newbuilding programme at preferential interest rates.
