The Carnival Corporation, which includes Holland America, Carnival Cruises, Princess Cruises, Seabourn, Cunard, AIDA and Costa Cruises posted its Q4 and year-end earnings report on 21DEC.
While the company saw an adjusted net loss of $2 billion for Q4, totalling a net loss of almost $8 billion for 2021, President and CEO Arnold Donald expects a return to profitability beginning in the second half of 2022.
The pandemic and, in particular, the recent rise in the Omicron variant has had a negative effect on bookings. But despite the setbacks, the company is optimistic about its future position.
Donald said he feels confident about the outlook for 2022: “During 2021, we believe we have clearly maximized our return to service and strengthened our financial position to withstand potential volatility on our path to profitability.”
The gradual resumption of operations is expected to generate positive cash flow in the second quarter of 2022. By JUN 2022, 94 ships will be in service across Carnival Corp.’s brands for a 100% per cent berth capacity. The company is also disposing of 19 smaller, less efficient ships, which will lead to a 4 per cent reduction in ship unit operating costs.
Booking Volume
Carnival Corp. did not provide detailed booking percentages but stated that despite the challenges, Q4 of 2021 brought higher volume than Q3.
Looking at future bookings, Donald stated that "Booking volumes continue to build for the remainder of 2022 and well into 2023 and we are achieving those early bookings with strong demand and pricing."
"Cumulative advanced bookings for the second half of 2022 and first half of 2023 are at the higher end of historical ranges and at higher prices, with or without FCCs, normalized for bundled packages, as compared to 2019 sailings."
Cumulative advanced bookings for the second half of 2022 and first half of 2023 are at the higher end of historical ranges and at higher prices.
Deposits
Deposits for Q4 also surpassed those of Q3, with $3.5 billion on the books as of 30NOV 2021, a $360 million increase compared to deposits of $3.1 billion in Q3.
Liquidity
Carnival Corp. will end 2021 with $9.4 billion in liquidity, “essentially the same” liquidity level as 2020, but with improved cash flow generation as the company’s ship operating cash flow and customer deposits continue to build.
Occupancy
Carnival Corp. reported that as of 30NOV 2021, having deployed 50 ships, 61 per cent of the company’s capacity was operating with occupancy at 58 per cent.
In particular, Carnival Cruise Line, operating at nearly 60 per cent of its capacity is approaching 90 per cent occupancy levels for the month of DEC.
Revenue Growth
Revenue per passenger cruise day (PCD) for Q4 2021 increased approximately 4 per cent compared to 2019.
Cash Burn
The company's monthly average cash burn rate for Q4 was $510 million, which was “better than expected.” In Q3, Carnival Corp. also reported the same cash burn of $510 million, and reported a cash burn of $500 million in Q2.
“Since resuming guest cruise operations, we have established effective protocols for COVID-19 and its variants and have returned 65,000 team members and 50 ships, all while delivering an exceptional guest experience to over 1.2 million guests and counting. And we have done that while honoring our commitment to strive for excellence in compliance, environmental protection and the health, safety and well-being of everyone,” said Donald.
