Carnival reports all time high full year revenues

Carnival Corporation CEO Josh Weinstein: “We ended the year on a high note.”

Cruising has come a long way since the dark days of the COVID shut-down when much loved veteran cruise ships were being beached for scrapping. Evidence of the industry bounce back came today. Shares in the world’s largest cruise ship operator, Miami-headquartered Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) were trading up today as the company reported fourth quarter and full year 2023 results that saw full year revenues hit an all-time high of $21.6 billion that included record fourth quarter revenues of $5.4 billion.

KEY HIGHLIGHTS

Full year 2023

• Full year revenues hit an all-time high of $21.6 billion.
• Full year cash from operations was $4.3 billion and adjusted free cash flow was $2.1 billion U.S. GAAP net loss of $74 million and positive adjusted net income of $1 million outperformed the September guidance range.
• The company made debt payments of $6 billion, reducing its debt balance by $4.6 billion from its peak in the first quarter of 2023 and ended the year with $5.4 billion of liquidity.
• The company entered 2024 with its best booked position on record, for both price and occupancy

Fourth quarter 2023

• Record fourth quarter revenues of $5.4 billion with record net per diems (in constant currency) significantly exceeding 2019 levels and above the September guidance range and record net yields (in constant currency)
• U.S. GAAP net loss of $48 million, or $(0.04) diluted EPS, and adjusted net loss of $90 million, or $(0.07) adjusted EPS,
• Booking volumes for the two weeks around Black Friday and Cyber Monday reached an all-time high for that period.
• Total customer deposits reached a fourth quarter record of $6.4 billion, surpassing the previous fourth quarter record of $5.1 billion (as of November 30, 2022), by 25 percent.

HIGH NOTE

“We ended the year on a high note with another record-breaking quarter that exceeded expectations and achieved positive full year adjusted net income. In fact, we consistently outperformed in all four quarters of the year, buoyed by a strengthening demand environment across all our brands,” said CEO Josh Weinstein. ”Net yields for the fourth quarter continued on a positive trajectory, were significantly higher than a very strong 2019 and even higher than we had anticipated, enabling us to overcome four years of high cost inflation to deliver five percent higher per unit EBITDA than 2019 (holding fuel and currency constant).”

“Thanks to a strong second half of 2023, we are already tracking ahead of our plan to achieve SEA Change, our three-year financial targets calling for the highest adjusted ROIC and adjusted EBITDA per ALBD in nearly two decades. Based on our 2024 guidance, we expect to deliver another big step forward, positioning us more than halfway toward realizing all our 2026 SEA Change targets. With nearly two-thirds of 2024 on the books already, we are well positioned to obtain another year of record revenues and adjusted EBITD,” Weinstein noted.

FINANCING AND CAPITAL ACTIVITY

“During 2023, we made debt payments of $6 billion and ended the year with just over $30 billion of debt, which is $3 billion better than we forecasted just nine months ago during our March conference call and almost $5 billion off the first quarter peak,” said CFO David Bernstein. “And looking forward, we will continue to evaluate refinancing opportunities and opportunistically prepay additional debt. Furthermore, we expect durable revenue growth to drive increases in adjusted free cash flow in 2024 and beyond, which will be the primary driver for paying down our debt balances on our path back to investment grade.”

During 2023, the company generated cash from operations of $4.3 billion and adjusted free cash flow of $2.1 billion. During the fourth quarter of 2023, the company reduced its debt by another $725 million and for the full year made debt payments of $6 billion while ending the fourth quarter with $5.4 billion of liquidity, including cash and borrowings available under the revolving credit facility. In addition, the company amended an agreement with one of its credit card processors and now expects an additional $800 million to be returned during the first quarter of 2024, representing substantially all of the credit card reserves balance as of November 30, 2023.

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