Carnival updates Red Sea situation – sees bookings rise

2024-02-13T21:33:54+00:00 February 13th, 2024|Safety|

Given recent developments in the Red Sea and in close consultation with security experts and government authorities, Carnival Corp is to reroute 12 ships across seven brands, which were due to transit the area through May, 2024.

This rerouting exercise is expected to have an adjusted earnings per share impact of $0.07 – $0.08 for full year 2024, with most of the impact coming in the second quarter.

Carnival explained that it had not seen an impact on booking trends, due to the Red Sea situation and had no other transits scheduled until November, 2024.

The company also said that it had experienced an early and robust start to wave season (peak booking period), exceeding expectations, with bookings volumes since November hitting an all-time high.

For early 2024, Carnival said that it continued to have the best booked position on record, with both pricing (in constant currency) and occupancy considerably higher than 2023 levels. As a result, the first half of 2024 is almost fully booked.

It believed that its continued strong bookings momentum is expected to deliver outperformance during the year, offsetting the Red Sea rerouting impact.

In addition, Carnival announced the redemption of the outstanding $571 mill, 9.875% second-priority senior secured notes due 2027, eliminating all of the remaining second lien debt outstanding.

This redemption is consistent with December guidance, using its cash flow strength to reduce interest expense and leverage along its path to investment grade credit metrics, the company claimed.

In a setback, Carnival’s Princess Cruises and Fincantieri have agreed to delay the delivery of ‘Sun Princess’, the largest vessel ever constructed in Italy and the first ship in a new series designed exclusively for the brand.

The postponement has led to the cancellation of the ship’s inaugural 10-day voyage, set to depart from Barcelona on 8th February.

“We understand that this news is disappointing, and we share in that disappointment. We recognise the anticipation that surrounded this sailing, and we sincerely apologise for the inconvenience this cancellation causes,” said John Padgett, Princess Cruises’ President.