Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) today reported a U.S. GAAP net loss of $2.2 billion and adjusted net loss of $1.9 billion for the fourth quarter of 2020.
The cruise giant said that it ended fourth quarter 2020 with $9.5 billion of cash and cash equivalents, with Chief Financial Officer David Bernstein saying, “We have the liquidity in place to sustain ourselves throughout 2021, even in a zero-revenue environment.”
The company’s monthly average cash burn rate for the fourth quarter 2020 was $500 million, which was slightly better than expected due to the timing of capital expenditures. The company expects the monthly average cash burn rate for the first quarter 2021 to be approximately $600 million.
Carnival continues to downsize its fleet and 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. Since the pause in guest operations Carnival has, it says, “accelerated the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years. The company now expects to dispose of 19 ships, 15 of which have already left the fleet. In total, the 19 ships represent approximately 13 percent of pre-pause capacity and only three percent of operating income in 2019.”
Based on the actions taken to date and the scheduled newbuild deliveries through 2022, Carnival says that, compared to 2019, its fleet will be more efficient with a roughly 14 percent larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each case as compared to 2019.
Cumulative advanced bookings for the first half of 2022 are ahead of 2019, despite minimal advertising or marketing.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “2020 has proven to be a true testament to the resilience of our company. We took aggressive actions to implement and optimize a complete pause in our guest cruise operations across all brands globally, and developed protocols to begin our staggered resumption, first in Italy for our Costa brand, then followed by Germany for our AIDA brand. We are now working diligently towards resuming operations in Asia, Australia, the U.K. and the U.S. over the course of 2021.”
“The initial cruises will continue to take place with adjusted passenger capacity and enhanced health protocols developed with government and health authorities, and guidance from our roster of medical and scientific experts,” says Carnival. noting that many of its brands source the majority of their guests from the geographical region in which they operate. In the current environment, the company believes this will benefit it in resuming guest cruise operations.”