MIAMI, April 7, 2021 /PRNewswire/ -- Carnival
Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) provides first
quarter 2021 business update.
- U.S. GAAP net loss of $(2.0)
billion and adjusted net loss of $(2.0) billion for the first quarter of
2021.
- First quarter 2021 ended with $11.5
billion of cash and short-term investments.
- Cash burn rate in the first quarter of 2021 was better than
expected as the company has identified and implemented
opportunities to optimize its monthly spend.
- Booking volumes for all future cruises during the first
quarter of 2021 were approximately 90% higher than booking volumes
during the fourth quarter of 2020.
- Cumulative advanced bookings for full year 2022 are ahead of
a very strong 2019, despite minimal advertising or
marketing.
- Six of the company's nine brands are expected to resume
limited guest cruise operations by this summer.
-
- AIDA resumed guest cruise operations in March sailing
in the Canary Islands.
- Costa expects to resume guest cruise operations in May
sailing to Italian ports.
- P&O Cruises (UK), Cunard and Princess Cruises will each
offer a series of UK cruises this summer.
- Seabourn expects to resume guest cruise
operations this summer sailing from Greece.
Carnival Corporation & plc President and Chief Executive
Officer Arnold Donald noted, "We are
focused on resuming operations as quickly as practical, while at
the same time demonstrating prudent stewardship of capital and
doing so in a way that serves the best interests of public health.
Our highest responsibility and therefore our top priority is always
compliance, environmental protection and the health, safety and
well-being of everyone." Donald added, "Our portfolio of brands
have clearly been an asset as we resume operations this summer with
nine ships across six of our brands."
Donald continued, "Throughout the pause we have been positioning
Carnival Corporation to return to serving guests an operationally
stronger company than we were before. With an exciting roster of
six new, more efficient ships by December and with lower capacity
from the exit of 19 less efficient ships, we expect to capitalize
on pent-up demand and achieve significant cost improvement from the
greater efficiency of our fleet, along with ongoing streamlining of
shoreside operations."
Update on Bookings
Donald added, "Booking volumes are accelerating. During the
first quarter of 2021 they were approximately 90% higher than
volumes during the fourth quarter of 2020 reflecting both the
significant pent up demand and long-term potential for
cruising."
Cumulative advanced bookings for full year 2022 are ahead of a
very strong 2019 as of March 21,
2021. The company highlights this level of bookings was
achieved with minimal advertising and marketing. (Due to the pause
in guest cruise operations in 2020, the company's current booking
trends will be compared to bookings trends for 2019
sailings.)
Total customer deposits as of February
28, 2021 and November 30, 2020
were $2.2 billion, the majority of
which are future cruise credits. During the quarter, customer
deposits on new bookings essentially offset the impact of refunds
provided. As of February 28, 2021,
the current portion of customer deposits was $1.8 billion, of which $0.7 billion relates to bookings for the
remainder of 2021.
Resumption of Guest Operations
The company is uniquely positioned for a phased resumption in
cruise travel given its multiple brands which can each be restarted
independently and tailored to the environment of their respective
source market. AIDA Cruises ("AIDA") resumed guest cruise
operations in late March sailing in the Canary Islands. Costa
Cruises ("Costa") expects to resume operations in May sailing to
Italian ports. P&O Cruises (UK), Cunard and Princess Cruises
will each offer a series of cruises this summer sailing around UK
coastal waters with P&O Cruises (UK) kicking off the season in
June followed by Cunard and Princess Cruises in July. Seabourn also
expects to resume guest cruise operations this summer sailing from
Greece. In addition, this summer
Holland America Line and Princess Cruises expect to offer
land-based vacation options for travelers to experience
Alaska through a combination of
tours, lodging and sightseeing.
Health and Safety Protocols
Initial cruises are taking place with adjusted passenger
capacity and enhanced health protocols developed with government
and health authorities, and guidance from the company's roster of
medical and scientific experts. The company has been working with a
number of world-leading public health, epidemiological and policy
experts to support its ongoing efforts with enhanced health and
safety protocols to help protect against and mitigate the impact of
COVID-19 during cruise vacations. The company's brands have a
comprehensive set of health and hygiene protocols that facilitate a
safe and healthy return to cruise vacations. These enhanced
protocols are modeled after shoreside health and mitigation
guidelines as provided by each brand's respective country, and
approved by all relevant regulatory authorities. Protocols will be
updated based on evolving scientific and medical knowledge related
to mitigation strategies. In addition to the jurisdictions
associated with the restart plans noted above, the company
continues to work closely with governments and health authorities
in other parts of the world to ensure that its health and safety
protocols will also comply with the requirements of each
location.
Increasing Liquidity
Carnival Corporation & plc Chief Financial Officer
David Bernstein noted, "We ended the
first quarter with $11.5 billion in
cash and short-term investments. At this time, we believe we have
enough liquidity to get us back to full operations and we will be
pursuing refinancing opportunities to reduce interest expense and
extend maturities. We have successfully identified and implemented
actions to optimize our monthly cash burn rate and we will continue
to do so."
The company's monthly average cash burn rate for the first
quarter of 2021 was $500 million,
which was better than expected primarily due to the timing of
capital expenditures. The company expects the monthly average cash
burn rate for the first half of 2021 to be approximately
$550 million, which is better than
previously expected. This is a result of the company's efforts to
optimize its monthly spend despite higher restart related spend.
This monthly average cash burn rate includes ongoing ship operating
and administrative expenses, estimated restart spend, working
capital changes (excluding changes in customer deposits), interest
expense and capital expenditures (net of export credit facilities),
and excludes scheduled debt maturities as well as other cash
collateral to be provided. As the company continues to resume guest
cruise operations, it expects to incur incremental spend relating
to bringing ships out of pause status, returning crew members to
its ships and implementing enhanced health and safety
protocols.
Due to the pause in guest operations, the company has taken
significant actions to preserve cash and secure additional
financing to increase its liquidity. Since March 2020, the company has raised $23.6 billion through a series of transactions,
including the following transactions since the beginning of the
first quarter 2021:
- Borrowed $1.5 billion under
export credit facilities in December
2020
- Issued $3.5 billion of senior
unsecured notes in February 2021
- Completed a $1.0 billion public
equity offering of its common stock in February 2021
During the remainder of fiscal 2021, the company expects to
refinance debt at lower interest rates and extend maturities.
As of February 28, 2021, the
company's outstanding debt maturities are as follows:
(in
billions)
|
|
2Q
2021
|
|
3Q
2021
|
|
4Q
2021
|
|
1Q
2022
|
Principal payments on
outstanding debt (a)
|
|
$
|
0.4
|
|
$
|
0.5
|
|
$
|
0.3
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Excluding the
revolving facility. As of February 28, 2021, borrowings under the
revolving facility were $3.1 billion. The
maturities for these borrowings are currently extended through
September 2021. The company may re-borrow such
amounts subject to satisfaction of the conditions in the revolving
facility agreement.
|
The pause in guest operations continues to have a material
negative impact on all aspects of the company's business, including
the company's liquidity, financial position and results of
operations. The company expects a net loss on both a U.S. GAAP and
adjusted basis for the second quarter 2021 and full year ending
November 30, 2021.
Conference Call
The company has scheduled a conference call with analysts at
10:00 a.m. EDT (3:00 p.m. BST) today to discuss its business
update. This call can be listened to live, and additional
information can be obtained, via Carnival Corporation & plc's
website at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation & plc is one of the world's
largest leisure travel companies with a portfolio of nine of the
world's leading cruise lines. With operations in North
America, Australia, Europe and Asia, its portfolio features – Carnival Cruise
Line, Princess Cruises, Holland America Line, P&O
Cruises (Australia),
Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK)
and Cunard.
Additional information can be found on www.carnivalcorp.com,
www.carnivalsustainability.com, www.carnival.com, www.princess.com,
www.hollandamerica.com, www.pocruises.com.au, www.seabourn.com,
www.costacruise.com, www.aida.de, www.pocruises.com and
www.cunard.com.
Cautionary Note Concerning Factors That May Affect Future
Results
Some of the statements, estimates or projections contained in
this document are "forward-looking statements" that involve risks,
uncertainties and assumptions with respect to us, including some
statements concerning future results, operations, outlooks, plans,
goals, reputation, cash flows, liquidity and other events which
have not yet occurred. These statements are intended to qualify for
the safe harbors from liability provided by Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. All statements other than statements of historical
facts are statements that could be deemed forward-looking. These
statements are based on current expectations, estimates, forecasts
and projections about our business and the industry in which we
operate and the beliefs and assumptions of our management. We have
tried, whenever possible, to identify these statements by using
words like "will," "may," "could," "should," "would," "believe,"
"depends," "expect," "goal," "anticipate," "forecast," "project,"
"future," "intend," "plan," "estimate," "target," "indicate,"
"outlook," and similar expressions of future intent or the negative
of such terms.
Forward-looking statements include those statements that relate
to our outlook and financial position including, but not limited
to, statements regarding:
•
Pricing
|
• Estimates of
ship depreciable lives and residual values
|
• Booking
levels
|
• Goodwill, ship
and trademark fair values
|
•
Occupancy
|
• Liquidity and
credit ratings
|
• Interest, tax
and fuel expenses
|
• Adjusted
earnings per share
|
• Currency
exchange rates
|
• Impact of the
COVID-19 coronavirus global pandemic
on our financial condition and results of
operations
|
|
Because forward-looking statements involve risks and
uncertainties, there are many factors that could cause our actual
results, performance or achievements to differ materially from
those expressed or implied by our forward-looking statements. This
note contains important cautionary statements of the known factors
that we consider could materially affect the accuracy of our
forward-looking statements and adversely affect our business,
results of operations and financial position. Additionally, many of
these risks and uncertainties are currently amplified by and will
continue to be amplified by, or in the future may be amplified by,
the COVID-19 outbreak. It is not possible to predict or identify
all such risks. There may be additional risks that we consider
immaterial or which are unknown. These factors include, but are not
limited to, the following:
- 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 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, reputation, litigation, cash
flows, liquidity, and stock price.
- As a result of the COVID-19 outbreak, we may be out of
compliance with one or more maintenance covenants in certain of our
debt facilities, with the next testing date of November 30, 2022.
- World events impacting the ability or desire of people to
travel have and may continue to lead to a decline in demand for
cruises.
- Incidents concerning our ships, guests or the cruise vacation
industry as well as adverse weather conditions and other natural
disasters have in the past and may, in the future, impact the
satisfaction of our guests and crew and lead to reputational
damage.
- Changes in and non-compliance with laws and regulations under
which we operate, such as those relating to health, environment,
safety and security, data privacy and protection, anti-corruption,
economic sanctions, trade protection and tax have in the past and
may, in the future, lead to litigation, enforcement actions, fines,
penalties and reputational damage.
- Breaches in data security and lapses in data privacy as well as
disruptions and other damages to our principal offices, information
technology operations and system networks, including the recent
ransomware incidents, and failure to keep pace with developments in
technology may adversely impact our business operations, the
satisfaction of our guests and crew and may lead to reputational
damage.
- Ability to recruit, develop and retain qualified shipboard
personnel who live away from home for extended periods of time may
adversely impact our business operations, guest services and
satisfaction.
- Increases in fuel prices, changes in the types of fuel consumed
and availability of fuel supply may adversely impact our scheduled
itineraries and costs.
- Fluctuations in foreign currency exchange rates may adversely
impact our financial results.
- Overcapacity and competition in the cruise and land-based
vacation industry may lead to a decline in our cruise sales,
pricing and destination options.
- Inability to implement our shipbuilding programs and ship
repairs, maintenance and refurbishments may adversely impact our
business operations and the satisfaction of our guests.
The ordering of the risk factors set forth above is not intended
to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a
prediction of actual results. Subject to any continuing obligations
under applicable law or any relevant stock exchange rules, we
expressly disclaim any obligation to disseminate, after the date of
this document, any updates or revisions to any such forward-looking
statements to reflect any change in expectations or events,
conditions or circumstances on which any such statements are
based.
CARNIVAL
CORPORATION & PLC NON-GAAP FINANCIAL
MEASURES
|
|
|
Three Months Ended
February 28/29,
|
(in
millions)
|
2021
|
|
2020
|
Net income
(loss)
|
|
|
|
U.S. GAAP net income
(loss)
|
$
|
(1,973)
|
|
|
$
|
(781)
|
|
(Gains) losses on ship sales
and impairments
|
3
|
|
|
928
|
|
Restructuring
expenses
|
—
|
|
|
—
|
|
Other
|
15
|
|
|
3
|
|
Adjusted net income
(loss)
|
$
|
(1,954)
|
|
|
$
|
150
|
|
Explanations of Non-GAAP Financial
Measures
Non-GAAP Financial Measures
We use adjusted net income (loss) as a non-GAAP financial
measure of our cruise segments' and the company's financial
performance. This non-GAAP financial measure is provided along with
U.S. GAAP net income (loss).
We believe that gains and losses on ship sales, impairment
charges, restructuring costs and other gains and losses are not
part of our core operating business and are not an indication of
our future earnings performance. Therefore, we believe it is more
meaningful for these items to be excluded from our net income
(loss), and accordingly, we present adjusted net income (loss)
excluding these items.
The presentation of our non-GAAP financial information is not
intended to be considered in isolation from, as substitute for, or
superior to the financial information prepared in accordance with
U.S. GAAP. It is possible that our non-GAAP financial measures may
not be exactly comparable to the like-kind information presented by
other companies, which is a potential risk associated with using
these measures to compare us to other companies.
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SOURCE Carnival Corporation & plc