Foschi’s analysis will surprise the market, coming as it does less than three weeks after Carnival chief operating officer Howard Frank anticipated losses of $100m for Costa Crociere this year. In an earnings call on March 9, Frank noted that AIDA and Iberocruceros, the other brands in Costa’s portfolio, were also having a difficult time.
Indeed, Carnival’s latest quarterly results included a non-cash writedown of $173m for Iberocruceros’ goodwill and trademark assets. Both AIDA and Iberocruceros had been significantly impacted by economic issues, Carnival said, though trends had recently improved in Germany. In that context, Foschi’s comments suggest the company now anticipates a dramatic improvement in booking trends, and so in the group’s fortunes, for full-year 2012.
In response to a request for clarification, a Carnival spokeswoman appeared to support that view. ‘Costa’s stated comments in their March 26 financial update relative to the outlook for 2012 is based on the anticipated performance of Costa, AIDA and Iberocruceros.’ She was unable to provide specifics, however, since ‘the company does not customarily break out information by individual brand.’
The spokeswoman had earlier noted that ‘additionally, there are differences between the Italian statutory financial reporting which Costa’s recent financial update referred to and the US GAAP reporting which was referred to in the Carnival Corp. and plc first quarter earnings call.’
Foschi’s comments came in a statement announcing the approval of Costa’s annual accounts for 2011, in which he noted that ‘despite continuing difficulties, bookings for 2012 are showing an upward trend with encouraging signs of recovery.’
Commenting on the year ahead, he said ‘it will be a difficult year, both because of the continuing economic crisis in the major European countries and the resulting drop in consumer spending, and the impact of the recent (Concordia) incident.’
At the same time, he anticipated closing the year with ‘positive financial results,’ noting that ‘bookings are bouncing back in various markets that are strategic for the company’s business. In addition, over the last few weeks bookings for Easter 2012 cruises are coming in at a stronger pace than last year.’
The company’s analysis of the opening months of this year came at a shareholders’ meeting that approved the accounts for 2011. Last year, the company’s three brands turned in consolidated revenues of €3.16bn, 9.6% up on the €2.88bn generated in 2010.
Total passenger count rose from 2.15m to 2.3m over the same period, an increase of 7.2% while passenger-days increased from 16.9m to 18.2m. Commenting on a strong year for the company, Foschi said it demonstrated its ‘strong economic foundations.’
He added that it also ‘demonstrates our ability to sustain, via consistent cash flow, our investments in new ships such as Costa Fascinosa, which will come into service at the end of April, and AIDAmar, which will join the fleet in May.’
He pointed out that ‘these improved results came at a very difficult time for the economy, characterised by recession and aggravated by the Arab crisis, which forced us to alter roughly a quarter of our itineraries.