Reporting a staggering second quarter loss and faced with a continuing pause in operations as a result of COVID-19 restrictions worldwide, Carnival Corporation & plc, the world’s largest cruise company, is planning to take measures that include selling more ships It says it intends to accelerate the removal of ships in FY 2020 that it had previously expected would be sold over the ensuing years. It already has preliminary agreements for the disposal of six ships that are expected to leave the fleet in the next 90 days and is currently working toward additional agreements.
Carnival’s preliminary financial report for the quarter ended May 31, 2020, included a staggering U.S. GAAP net loss of $4.4 billion that included $2.0 billion of non-cash impairment charges. Revenues for the second quarter of 2020 were $0.7 billion, compared with $4.8 billion in the second quarter of last year.
The company says it is unable to definitively predict when it will return to normal operations. As a result, it says it is currently unable to provide an earnings forecast. The pause in guest operations is continuing to have material negative impacts on all aspects of the company’s business. The longer the pause in guest operations continues the greater the impact on the company’s liquidity and financial position. It expects a net loss on both a U.S. GAAP and adjusted basis for the second half of 2020.
Carnival said that its cash burn rate in the second quarter 2020 was “generally in line with the previously disclosed expectations.
“Second quarter 2020 ended with $7.6 billion of available liquidity, and the company expects to further enhance future liquidity, including through refinancing scheduled debt maturities. In addition, the company has $8.8 billion of committed export credit facilities that are available to fund ship deliveries originally planned through 2023,” the company disclosed.
GETTING GUESTS AND CREW HOME
Carnival says that it has returned over 260,000 guests to their homes, coordinating with a large number of countries worldwide. In addition to chartering aircraft and utilizing commercial flights the company says it has even used its ships to sail home guests who could not fly
“Working around the clock with various local governmental authorities to repatriate shipboard team members as quickly as possible,” says Carnival. “49 cruise ships have traveled more than 400,000 nautical miles and the company has chartered hundreds of planes to repatriate approximately 60,000 of its shipboard team members to more than 130 countries around the globe. The company expects substantially all of the approximately 21,000 remaining shipboard team members to be able to return home by the end of June. The safe manning team members will remain on the company’s ships”