Carnival wider than expected Q1 loss but booking volumes way up

The US GAAP and adjusted net loss of $1.9bn, or $1.66 per share, compared to Wall Street's 89-cent consensus expectation. Revenues were $1.6bn, under the $2.3bn consensus.

First quarter occupancy was 54%, a 20% increase over the prior quarter. Available lower berth days were 13m, or 60% of total fleet capacity, increasing from 47% in Q1 2021.

Q2 loss, Q3 profit forecast

'Despite the impact of Omicron, guests carried grew by nearly 20% in the first quarter compared to the prior quarter, while simultaneously increasing revenue per passenger cruise day and driving an improvement in adjusted EBITDA. We expect monthly adjusted EBITDA to turn positive by the beginning of our summer season as we build occupancy and return more ships to service,' Carnival Corp. & plc President and CEO Arnold Donald said.

The company continues to expect a Q2 net loss on both a US GAAP and adjusted basis. However, a Q3 profit is forecast. A loss is expected for full year 2022.

Revenue per cruise day up 7.5%

Revenue per passenger cruise day increased approximately 7.5% compared to a strong 2019. This increase was driven by exceptionally strong onboard and other revenue.

As of today, 75% of the company's capacity has resumed passenger operations, with the full fleet expected to be back for each brand's respective summer season.

Extended wave season

Since the middle of January, Carnival Corp. has seen an improving trend in weekly booking volumes. Recent weekly booking volumes have been higher than at any point since the restart of passenger operations.

'Given the recent strengthening in booking volumes coupled with the closer-in booking patterns, we expect an extended wave season,' Donald said. 'In fact, we gained occupancy even in the month of March with fleetwide occupancy nearing 70% and several sailings already exceeding 100%.'

$7.2bn liquidity

The company ended Q1 with $7.2bn of liquidity, including cash, short-term investments and borrowings available under its revolving credit facility. Carnival invested $400m in capital expenditures (net of export credit facilities) during the quarter, which included taking delivery of three of the four larger, more efficient ships expected in 2022. They were Costa Toscana, AIDAcosma and Discovery Princess.

In addition, the company repaid $500m of debt principal and incurred $400m of interest expense, net.

Three more ships to exit for total of 22

Three additional ships are expected to leave the fleet in 2022 in connection with Carnival Corp.'s ongoing fleet optimization strategy. In total, this represents the planned removal of 22 smaller, less efficient ships since the beginning of the pandemic shutdown.

'Upon returning to full operations, nearly 25% of our capacity will consist of newly delivered ships, which we believe will expedite our return to profitability and improve our return on invested capital,' Donald said.

Chief climate officer

Building on the company's governance framework, Carnival's boards appointed Donald to the new, added role of chief climate officer.

Add Seatrade Cruise News to your Google News feed.