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Carnival equivocal on a 2nd 2028 newbuild, eyes investment grade in 2026

CEO Josh Weinstein, left, and CFO David Bernstein said Carnival Corp. & plc is sticking to its post-pandemic strategy of just one to two newbuild deliveries a year starting in 2027
Carnival Corp. & plc is equivocal on a possible second newbuild in 2028 but said any additional capex from recent orders won't deter a return to investment grade status.

CEO Josh Weinstein reiterated that Carnival would be adding one to two ships a year starting in 2027 and that just one — a fourth Excel newbuild for Carnival Cruise Line — is coming in 2027.

Yesterday the company announced a fifth Excel for the Carnival brand in 2028 so today's first quarter earnings call raised the question about a possible second 2028 delivery.

'2028: Could there be another one? It's not closed but I wouldn't necessarily bank on it, either,' Weinstein told analysts. 'We are working on more things that are going to be geared to our highest returning brands ... and when there's something to talk about, we'll certainly share it.'

This led another analyst to ask if the resumption of newbuild orders could change or alter Carnival's path to investment grade status by adding more capex to the system longer-term?

Investment grade metrics in 2026

'No, not at all,' Carnival Corp. CFO David Bernstein said. 'We are working on the road to investment grade. We are prioritizing the repayment of debt and the repurchase of debt, as we did in the first quarter ... We prepaid $1.8b of debt so far this year, and with improved EBITDA, we expect investment grade metrics in 2026.'

By Carnival sticking to its commitment to add only one to two ships a year and with cash generated, 'We expect to continue to see improved net debt to EBITDA in 2027 and 2028 as well, even with the new orders,' Bernstein continued.

Weinstein underscored that in making its projections, Carnival factored in the assumption there would be newbuilds with stage payments due.