MSC to halt expenditure for 18 months

2020-03-26T22:44:32+00:00 March 26th, 2020|Finance|

In line with all the other cruise companies, MSC Cruises has temporarily stopped all its US-based embarkations until 30thApril, and halted ship operations across all areas considered high risk for the virus – the Mediterranean, the Arabian Gulf and Asia.

Ships still in operation in South America and South Africa, as well as a world cruise, are ending operations when they conclude their scheduled itineraries, the company said.

To bolster its finances, MSC Cruises arranged a revolving credit facility in February, 2019 and said it had other ‘significant’ sources of liquidity, which may be activated as necessary. These collectively amount to €900mill over and above the company’s cash position as at 31stDecember of €183mill.

MSC Cruises said it was also reducing operational expenses under a contingency plan and is collaborating with key providers and stakeholders to improve its working capital position. In addition, capital expenditures will be postponedfor the next 18 months.

In its annual results roundup for 2019, MSC Cruises revealed an increase in its 2019 net profit of 16% on a 17.5% rise in revenues.

Net profit rose to €405mill from €348mill recorded for 2018, on revenues of €3.2 bill, up from €2.7 bill in the preceding year.

Passenger occupancy was 112.3%, up from the company’s record 111.6% in 2018. More than 2.7mill passengers were carried, a 16.2% increase over 2018, MSC said.

EBITDA increased by 15.6%to €857mill.

Given the uncertainty regarding COVID-19 and its effects, MSC Cruises wasn’t able to provide guidance on its 2020 financial performance.