Carnival Corp. reports second quarter losses, will shed 6 ships in next three months

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Carnival Corporation reported second quarter revenues of $700 million, down from $4.8 billion last year, as cruising remains banned in the U.S. amid the COVID-19 pandemic.

In a financial filing Thursday, the company said it saw an adjusted net loss of $2.4 billion, or $3.30 earnings per share, during the second quarter. The company will be divesting of six of its ships in the next 90 days to shrink capacity as it burns through around $650 million per month. A spokesperson declined to name which ships will be leaving the fleet.

Carnival Corp.’s financial update comes more than three months after the cruise industry shut down operations on March 13. Cruises are banned in the U.S. through at least July 24, when the U.S. Center for Disease Control and Prevention’s no-sail order expires.

Carnival Corp. and competitors Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings — all based in Miami — reported first quarter losses. Carnival Corp is the largest cruise company in the world with 104 ships across its nine cruise lines.

Since mid-March, cruise companies have been raising capital and cutting expenditures as they struggle to repatriate crew members, more than 40,000 of whom remain stuck at sea. Some 21,000 Carnival Corp. crew members are still awaiting repatriation, a processes the company said it expects to finish by the end of the month.

In May, Carnival Corp. laid off 820 people in South Florida out of a local workforce of roughly 3,000, and furloughed another 537 workers. That month, the company announced the departure of two brand presidents, Seabourn’s Rick Meadows, who is retiring, and Holland America Line’s Orlando Ashford, along with 450 employees in the United Kingdom. Carnival employed about 150,000 workers worldwide prior to the onset of the coronavirus pandemic.

The company said Thursday it does not know when cruising will resume, though Carnival Cruise Line has already announced it will start cruising from Florida and Texas on August 1.

“The company is unable to definitively predict when it will return to normal operations,” the filing said.

The company expects all of its ships to reach “paused status” by the end of the third quarter, reducing monthly cash burn for ship operations to $250 million. Currently 62 ships are in this status.

Carnival Corp. said it ended the second quarter with $7.6 billion of available liquidity, including $2.9 billion in customer deposits as of May 31. About $475 million of those deposits are for cruises in the fall and winter of 2020. Cruise bookings in the second quarter were “running meaningfully behind the prior year,” the company said, though demand increased for 2021 cruises in the second quarter compared to the first.

The CDC has not yet begun to review company plans to safely restart cruising. Earlier this week, the the agency published its new scorecard for ships in U.S. waters — a green/yellow/red coded system depending on the ship’s level of COVID-19 infection. Carnival Corp. does not currently have any ships in U.S. waters.


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