15th Sep 2020 12:45
(Alliance News) - Carnival PLC swung to a third quarter loss, the cruise ship operator said on Tuesday, as it unveiled cost-cutting plans to emerge from Covid-19 with a "more efficient fleet".
In the three months to August 31, Carnival swung to a net loss of USD2.86 billion, from a profit of USD1.78 billion a year earlier. It means that for the first nine months of its financial year, it has made a chunky net loss of USD8.01 billion, compared to a USD2.57 billion profit a year earlier.
Earlier in September, the company's Italian arm Costa completed its first seven-day cruise since operations were halted due to the Covid-19 outbreak.
"Soon a second of our nine World's Leading Cruise Lines' brands will resume guest operations, our German sourced brand AIDA. Our business relies solely on leisure travel, which we believe has historically proven to be far more resilient than business travel and cannot be easily replaced with video conferencing and other means of technology. Our portfolio includes many regional brands which clearly position us well for a staggered return to service in the current environment," Chief Executive Officer Arnold Donald said.
Carnival said it is taking "aggressive action to emerge a leaner more efficient company". It is accelerating the exit of 18 "less efficient ships", which will cut capacity by 12% but "structurally lower" its cost base.
"With two thirds of our guests repeat cruisers each year, we believe the reduction in capacity leaves us well positioned to take advantage of the proven resiliency of, and the pent up demand for cruise travel - as evidenced by our being at the higher end of historical booking curves for the second half of 2021," CEO Donald said.
"We will emerge with a more efficient fleet, with a stretched out newbuild order book and having paused new ship orders, leaving us with no deliveries in 2024 and only one delivery in 2025, allowing us to pay down debt and create increasing value for our shareholders."
Carnival shares were 2.1% lower at 1,079.00 pence each in London on Tuesday afternoon.
By Eric Cunha; [email protected]
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