Positive news continues to come from cruise ship operator Carnival

Last week, cruise operator Carnival Corporation & plc (CCL) presented the fourth-quarter results. They turned out to be slightly lower than Wall Street’s expectations, but they generally demonstrate the company’s recovery and its readiness to return to full-fledged work.

Carnival launched flights on 22 liners in the fourth quarter, but by the end of this year, the company plans to use two-thirds of the ships’ capacity. As a result, the entire fleet of the cruise operator will be back in operation by the spring of 2022. Carnival could carry 850,000 passengers two and a half times more during the fourth quarter than in the third quarter. There is a significant demand for cruise tours. 

The number of bookings for future routes in 2022 and 2023 is constantly growing, and this may be comparable to the level that Carnival reached in 2019. Carnival’s revenue in the fourth quarter was $1.29 billion, less than the $1.34 billion expected on Wall Street. However, revenue per cruise day per passenger was 4% more than in the fourth quarter of 2019. Thus, restoring full fleet utilization will allow Carnival to return to new revenue records quickly. 

Same time, the company reports losses, which amounted to $ 2.6 billion, or $2.31 per share in the past quarter. It is important to note that Carnival Corporation has refinanced most of its debt, saving $400 million annually on interest payments. It also means that the company does not need financing next year. The monthly cash expenditure of $510 million, although significant, is less than planned due to lower capital expenditures. 

Carnival is probably in the best financial position since the pandemic’s start. The advantage of Carnival is the appearance of a new generation of liners in its fleet. 50% of the company’s capacity after returning to total capacity will now consist of these new, larger, and more efficient ships. They will help accelerate Carnival’s return to profitability and increase the return on invested capital because the new vessels will increase the prices of tours due to increased comfort for passengers. Since the demand for cruises is now significant and grows, consumers will likely perceive such an increase neutrally.