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20 Dec 2021 | 14:23

Carnival confident in year ahead after Q4 earnings miss

(Sharecast News) - Cruise giant Carnival missed Wall Street expectations on fourth quarter earnings on Monday, with its net losses coming in at $2.6bn, and adjusted net losses at $2bn, although it did paint a brighter picture of the year ahead. The London- and New York-traded company said its losses per share totalled $2.31 for the period, or $1.72 when adjusted for non-recurring costs.

That came in wider than average expectations from Wall Street analysts for losses of $1.45 per share.

Carnival said revenue for the quarter totalled $1.29bn, also coming in short of expectations for revenue of $1.49bn, as the company ended the period with $9.4bn of liquidity.

For the cruise segments, revenue per passenger cruise day (PCD) was reportedly up 4% from a "strong" pre-pandemic 2019 figure, which the firm said was driven in part by "exceptionally strong" onboard and other revenue.

As of 30 November, 61% of the company's capacity was operating with guests on board, with it expecting the full fleet to be back in operation in the spring of 2022.

Cumulative advanced bookings for the second half of 2022 and the first half of 2023 were said to be "at the higher end" of historic ranges and at higher prices compared to 2019 sailings.

Customer deposits increased $360m in the fourth quarter, marking the third consecutive quarter the company saw an increase in customer deposits.

Through its debt management efforts, Carnival said it had refinanced more than $9bn to date, reducing its future annual interest expense by about $400m per year and extending maturities.

"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," said president and chief executive officer Arnold Donald.

"And we have done that while honouring our commitment to strive for excellence in compliance, environmental protection and the health, safety and well-being of everyone.

"Our cash from operations turned positive in the month of November, and we expect consistently positive cash flow beginning in the second quarter of 2022 as additional ships resume guest cruise operations."

Donald noted that the company was entering its new financial year with $9.4bn of liquidity, "essentially the same" level as last year but with improved cash flow generation ahead, as ship operating cash flow and customer deposits built further.

"During 2021, we believe we have clearly maximised our return to service and strengthened our financial position to withstand potential volatility on our path to profitability."

At 1442 GMT, shares in Carnival were down 0.37% in London at 1,241.6p, while it was ahead 1.39% in New York at $18.53.
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