Carnival Corporation Reports Second Quarter Results and Update on Business

With cruise operations paused due to the coronavirus pandemic, Carnival Corporation & plc reported total revenues of $0.7 billion for the second quarter of 2020, compared to $4.8 billion during the same period last year.

The cruise giant also recorded U.S. GAAP net loss of $4.4 billion for the second quarter, $2 billion of which represented non-cash impairment charges.

Carnival closed the quarter with $7.6 billion of available liquidity but plans to further enhance future liquidity through refinancing scheduled debt maturities and other means. The company added that it has $8.8 billion of committed export credit facilities available to fund ship deliveries originally planned through 2023.

Currently, 62 of Carnival’s ships are in their final expected pause location, with the remainder expected to reach full pause status sometime during the third quarter.

Carnival said it still plans to work closely with government and health authorities to resume cruise operations in phases. “The company anticipates that initial sailings will be from a select number of easily accessible homeports,” Thursday’s update read. “The company expects future capacity to be moderated by the phased re-entry of its ships, the removal of capacity from its fleet and delays in new ship deliveries.”

Carnival plans to speed up its sale of several ships it was already planning to part ways with in the coming years, confirming that the company already has preliminary agreements in place for the removal of six ships that are expected to leave the fleet in the next 90 days.

In an update on bookings, Carnival announced that approximately half of impacted guests have requested cash refunds as of May 31, 2020. Looking ahead to 2021, Carnival is seeing increasing demand from new bookings. For the six weeks ending May 31, 2020, approximately two-thirds of 2021 bookings were new bookings, the company reported, with the remaining one-third resulting from guests applying their future cruise credits.

“COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations,” the company said. “The current, and uncertain future, impact of the COVID-19 outbreak, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, growth, reputation, litigation, cash flows, liquidity and stock price.”

After previously indicating that it planned to resume operations with only eight ships sailing from Miami, Port Canaveral and Galveston on August 1, Carnival CEO Arnold Donald recently said that the company is unsure when cruises will return.

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