Carnival Corp. reports US$4.37b loss for Q2 but says 2021 demand is up

MIAMI — Carnival Corp. has reported a US$4.37 billion loss for Q2 2020, as it continues to navigate rough seas amid the COVID-19 pandemic.

Revenue for the second quarter totalled $700 million.

Like other cruise companies, Carnival Corp. has been offering the option of either future cruise credits, or refunds, for passengers impacted by cancelled cruises due to the pandemic.

The company says that as of May 31, approximately half of its passengers affected have requested cash refunds.

Meanwhile, with a dozen or so of the biggest brands in cruising, Carnival Corp. says that despite substantially reduced marketing and selling spend the company is seeing growing demand from new bookings for 2021.

For the six weeks ending May 31, 2020, approximately two-thirds of 2021 bookings were new bookings. The remaining 2021 booking volumes resulted from passengers applying their FCCs to specific future cruises.

The pandemic will almost certainly impact delivery of Carnival Corp.’s new ships in the coming months. Carnival Corp. had four ships, including the new Mardi Gras, scheduled to be delivered between May and October 2020. The company says it believes COVID-19 has impacted shipyard operations and will result in delivery delays of the ships this year and is working with the shipyards on revised timing.

Carnival Corp. says its cash burn rate during the pause in guest operations is estimated to be approximately $650 million every month for the second half of 2020.

This cash burn rate includes ongoing ship operating and administrative expenses, committed capital expenditures (net of committed export credit facilities), interest expense and excludes changes in customer deposits and scheduled debt maturities.

Like all U.S.-based cruise companies Carnival Corp. is currently subject to the CDC’s No Sail order. Once the order is lifted Carnival Corp. says it expects to resume guest operations, after collaboration with both government and health authorities, in a phased manner, with specific ships and brands returning to service over time.

The company adds that it anticipates initial sailings will be from a select number of easily accessible homeports, and says future capacity will be moderated by the phased re-entry of its ships, the removal of capacity from its fleet and delays in new ship deliveries.

Carnival Corp. intends to accelerate the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years. The company already has preliminary agreements for the disposal of six ships which are expected to leave the fleet in the next 90 days and says it is currently working toward additional agreements.

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