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MSC Cruises reports 2019 profit, outlines steps to bolster financial positionMSC Cruises reports 2019 profit, outlines steps to bolster financial position

MSC Cruises increased 2019 net profit 16% on a 17.5% spike in revenues. In reporting earnings today, the company also outlined actions to shore up its financial position during the coronavirus crisis.

Anne Kalosh, Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

March 20, 2020

2 Min Read
Credit: Seatrade Cruise News

Liquidity

MSC Cruises arranged a revolving credit facility in February 2019 and said it has other 'significant' sources of liquidity which may be activated in case of further needs. These collectively amount to €900m over and above the company's cash position at Dec. 31 of €183m.

MSC Cruises is also reducing operational expenses under a contingency plan and is collaborating with key providers and stakeholders to improve its working capital position. Additional actions being pursued include postponing capital expenditures in the coming 18 months.

Given the uncertainty regarding COVID-19 and its effects, MSC Cruises isn't currently able to provide guidance on 2020 financial performance.

The company said: 'The cruise business navigated through several adverse events in the past years and demonstrated high resilience to such events. Revenues normalized quickly, within six to 12 months, and none of the past adverse events had a negative long-term impact on the profitability of the underlying cruise business model.'

2019 results

2019 net profit rose to €405m from €348m the year before, on revenues of €3.2bn, up from €2.7bn.

Passenger occupancy was 112.3%, up from the company's record 111.6% in 2018. More than 2.7m passengers were carried, a 16.2% increase over 2018.

EBITDA was €857m, a 15.6% increase. 2019 capacity was 14.4% higher than in 2018.

Fuel expense rose 24.1% to €244m, mainly driven by the additional capacity and higher fuel prices. Interest expenses decreased 4.7% to €121m.

Temporarily winding down global operations

As earlier reported, MSC Cruises temporarily stopped all its US-based embarkations for 45 days, until April 30, and halted ship operations across all areas considered high risk for the virus, in the Mediterranean, the Arabian Gulf and Asia. Ships still in operation in South America and South Africa, as well as a world cruise, are ending operations when they conclude their scheduled itineraries.

 

Read more about:

MSC Cruisescoronavirus

About the Author

Anne Kalosh

Editor, Seatrade Cruise News & Senior Associate Editor, Seatrade Cruise Review

Anne Kalosh covers global stories, reporting both breaking and in-depth news on cruising's significant people, places, ships and trends. A sought-after expert on cruising, she has moderated conferences around the world, including the high-profile State of the Industry panel at Seatrade Cruise Global. She created and led the acclaimed itinerary-planning case study for Seatrade's cruise master classes held at Cambridge and Oxford universities. She has been the cruise columnist for AFAR.com, and her freelance stories have appeared in a wide range of publications, from The New York Times to The Miami Herald.

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