01—Abstract
Summary
Summary of the 10-Q filed April 7, 2021. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc (CCL) reported a substantial net loss of $1.97 billiona for the quarter ending February 28, 2021, a significant increase from the $781 million loss in the prior year period.
This was driven by a near-complete cessation of cruise operations due to the COVID-19 pandemic, resulting in a 99% decrease in revenues year-over-year. Despite the severe downturn, the company has been actively managing its liquidity, raising substantial capital through debt and equity offerings. As of the reporting date, Carnival had approximately $11.5 billionb in cash and short-term investments, which management believes is sufficient to cover obligations for at least the next twelve months.
The company is preparing for a phased resumption of cruise operations, with some brands already commencing or planning to restart in the near future with enhanced health and safety protocols. However, the full impact of the pandemic on future bookings, operations, and financial performance remains uncertain, and management anticipates continued net losses through at least the remainder of fiscal year 2021.
02—Key points
Key Highlights
- Reported a net loss of $1.97 billion for the quarter ended February 28, 2021, compared to a net loss of $781 million in the prior year period.
- Revenues decreased by 99% year-over-year, reflecting the continued pause in guest cruise operations due to COVID-19.
- The company raised significant capital, approximately $6.0 billion since December 2020 through debt and equity transactions, to bolster liquidity.
- As of February 28, 2021, Carnival Corporation & plc held $11.5 billion in cash and short-term investments, providing a liquidity buffer.
- A phased resumption of guest cruise operations has begun, with several brands initiating or planning to restart sailings with enhanced health and safety protocols.
- Management anticipates continued net losses for the second quarter and the full fiscal year 2021, acknowledging the ongoing uncertainty from the pandemic.
- The company successfully obtained waivers for certain debt covenants, demonstrating proactive management of its financial obligations.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed April 7, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $26.00M$4.79B | −99.5% |
| Cost of Revenue | $535.00M$3.52B | −84.8% |
| Gross Profit | -$509.00M$1.27B | −140.2% |
| SG&A Expenses | $462.00M$678.00M | −31.9% |
| Operating Expenses | $1.55B$5.50B | −71.8% |
| Operating Income | -$1.52B-$713.00M | −113.7% |
| Interest Expense | $398.00M$55.00M | +623.6% |
| Net Income | -$1.97B-$781.00M | −152.6% |
| EPS (Basic) | $-1.80$-1.14 | −57.9% |
| EPS (Diluted) | $-1.80$-1.14 | −57.9% |
| Shares Outstanding (Basic) | 1.09B684.00M | +60.1% |
| Shares Outstanding (Diluted) | 1.09B684.00M | +60.1% |
05—Questions
Frequently Asked Questions
What was Carnival's financial performance for the quarter ending February 28, 2021?
Carnival Corporation & plc reported a significant net loss of $1.97 billion for the quarter, a substantial increase from the $781 million net loss in the same period last year. This was primarily due to a near-complete halt in cruise operations caused by the COVID-19 pandemic, which led to a 99% drop in revenues.
How is Carnival managing its liquidity during this challenging period?
The company has been actively raising capital to preserve cash and ensure liquidity. Since December 2020, Carnival has raised approximately $6.0 billion through various debt and equity transactions. As of February 28, 2021, they held $11.5 billion in cash and short-term investments, which management believes is sufficient to meet obligations for at least the next twelve months.
What is the outlook for Carnival's return to normal operations?
Carnival has begun a phased resumption of cruise operations, with some brands restarting or planning to restart soon, implementing enhanced health and safety protocols. However, the company anticipates continued net losses through the rest of fiscal year 2021 due to the ongoing impact and uncertainties surrounding the COVID-19 pandemic. The full extent of the impact on future bookings and financial performance remains uncertain.
What is the status of Carnival's debt obligations and covenants?
Carnival has proactively managed its debt obligations. The company secured waivers for certain debt covenants, specifically the Interest Coverage Covenant and Debt to Capital Covenant, for its export credit facilities through August 2022 or November 2022. While they remain compliant with current covenants, the company continues to monitor and manage its debt structure, including plans to refinance debt at potentially lower interest rates and extend maturities.
06—Continue