20th Mar 2020 08:26
(Alliance News) -Â Carnival Corp on Thursday it swung to a first-quarter loss, with earnings dented by disruption due to the early days of the current Covid-19 pandemic.
Carnival PLC shares were up 6.2% in London early Friday at 782.60 pence.
The company recorded a GAAP net loss of USD781 million, or USD1.14 per share, for the quarter ended February 29. This compares to net income of USD336 million, or earnings per share of USD0.48, for the first quarter a year ago.
The impact of Covid-19 on the first quarter's net loss was around USD0.23 per share, the firm said, taking into account cancelled voyages and disruptions.
Revenue for the quarter increased 2.1% to USD4.8 billion from USD4.7 billion a year ago.
"Wave season started strong with booking volumes for the three weeks ending January 26, 2020, running higher than the prior year for the remaining three quarters of the year on a comparable basis," the company said.
However, for the seven-week period beginning January 26 and ending March 15, booking volumes for the remainder of the year were "meaningfully behind" a year ago on a comparable basis due to Covid-19.
"Cumulative advanced bookings for the remainder of 2020, are meaningfully lower than the prior year at prices that are considerably lower than the prior year on a comparable basis, reflecting the impact of Covid-19," the cruise operator said.
Carnival said Covid-19 will have a "material negative impact" on its financial results and liquidity.
The cruise ship operator has voluntarily paused Princess Cruises's global operations for sixty days in response to the "unpredictable circumstances" evolving from the spread of Covid-19 virus. Carnival Cruise Line, Cunard North America, Holland America Line and Seabourn also will suspend operations for one month.
"The corporation also believes the effects of Covid-19 on the shipyards where its ships are under construction, will result in a delay in ship deliveries. The corporation is taking additional actions to improve its liquidity, including capital expenditure and expense reductions, and pursuing additional financing," Carnival said.
Given the current uncertainty, the FTSE 100 constituent said it is unable to provide an earnings forecast. It does, though, expect a net loss for the financial year ending November 30, as guided at the start of the week.
For financial 2019, Carnival posted pretax profit USD3.06 billion, on revenue of USD20.83 billion. Net income stood at USD2.99 billion.
As of the end of February, Carnival had USD11.7 billion in liquidity.
This included USD3.0 billion of immediate liquidity plus USD2.8 billion from four committed export credit facilities that are available to fund the originally planned ship deliveries for the remainder of this year, the company said, and USD5.9 billion from committed export credit facilities that are available to fund ship deliveries originally planned in 2021 and beyond.
On March 13, Carnival fully drew down its USD3.0 billion multi-currency revolving credit.
"The corporation borrowed under the facility agreement in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the Covid-19 outbreak," the firm said.
It added that all of its assets, which the exception of some ships, are available to be pledged as collateral.
By Lucy Heming;Â [email protected]
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