Carnival sees quarterly loss improve marginally as operations ramp up

(Alliance News) - Carnival PLC on Friday reported a marginally improved loss in the third quarter ...

Alliance News 24 September, 2021 | 2:05PM
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(Alliance News) - Carnival PLC on Friday reported a marginally improved loss in the third quarter of its financial year, with downbeat US consumers in August scuppering booking rates as the cruise ship operator slowly starts weighing anchor.

Carnival shares were up 8.2% to 37.50 pence each in London on Friday afternoon.

The global operator of cruise lines booked a net loss of USD2.84 billion in the three months to August 31, improving from USD2.86 billion a year prior.

In the nine months to end August, net loss narrowed to USD6.88 billion from USD8.01 billion.

Booking volumes for all future cruises during the third quarter of 2021 were higher than booking volumes during the first quarter of 2021, albeit not as robust as the second quarter, Carnival noted. This was due to lower booking volumes in August, reflecting the impact on overall US consumer confidence resulting from heightened uncertainty around the Covid-19 Delta variant.

Consumer confidence in the US slipped to a six-month low in August, according to figures from the Conference Board published at the end of August. The Conference Board's consumer confidence index fell to 113.8 points, down from the 125.1 tally in July.

Carnival said that it ended the quarter with USD7.8 billion of liquidity, which it believes is enough to return to full cruise ship operations.

By the end of August, eight of the company's nine brands had resumed guest operations "as part of its gradual return to service".

"Even at this early stage with intentionally constrained occupancy levels, our voyages are already cash flow positive," noted Chief Executive Arnold Donald.

"Beyond the enthusiasm of our guests and crew and the unprecedented net promoter scores, it is difficult to demonstrate just how successful our restart effort has been because many cruises, while generating positive cash flow, were limited to scenic cruises without ports of call, and generally priced well below the attractive destination rich cruises we normally offer," he said.

The company's monthly average cash burn rate for the third quarter of 2021 was USD510 million, which was better than previous guidance and in line with the USD500 million monthly average cash burn rate for the first half of 2021.

However, the average cash burn rate is expected to rise in the fourth quarter of its financial year "due to the timing of incremental restart expenditures".

The company expects a net loss for the year ending November 30.

By Greg Roxburgh; gregroxburgh@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Carnival PLC 1,027.50 GBX -1.01

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