10-QPeriod: Q1 FY2021

CARNIVAL CORP Quarterly Report for Q1 Ended Feb 28, 2021

Filed April 7, 2021For Securities:CCL

Summary

Carnival Corporation & plc (CCL) reported a substantial net loss of $1.97 billion 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 billion 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.

Financial Highlights

53 data points
Beta

Revenue

$26.00M

-1957.7% Gross Margin

Net Income

-$1.97B

-7588.5% Net Margin

EPS (Diluted)

$-1.80

Total Assets

$57.23B

Cash & Equivalents

$9.83B

Free Cash Flow

-$3.28B

Financial Statements
Beta
Revenue$26.00M
Cost of Revenue$535.00M
Gross Profit-$509.00M
SG&A Expenses$462.00M
Operating Expenses$1.55B
Operating Income-$1.52B
Interest Expense$398.00M
Net Income-$1.97B
EPS (Basic)$-1.80
EPS (Diluted)$-1.80
Shares Outstanding (Basic)1.09B
Shares Outstanding (Diluted)1.09B

Key Highlights

  • 1Reported 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.
  • 2Revenues decreased by 99% year-over-year, reflecting the continued pause in guest cruise operations due to COVID-19.
  • 3The company raised significant capital, approximately $6.0 billion since December 2020 through debt and equity transactions, to bolster liquidity.
  • 4As of February 28, 2021, Carnival Corporation & plc held $11.5 billion in cash and short-term investments, providing a liquidity buffer.
  • 5A phased resumption of guest cruise operations has begun, with several brands initiating or planning to restart sailings with enhanced health and safety protocols.
  • 6Management anticipates continued net losses for the second quarter and the full fiscal year 2021, acknowledging the ongoing uncertainty from the pandemic.
  • 7The company successfully obtained waivers for certain debt covenants, demonstrating proactive management of its financial obligations.

Frequently Asked Questions

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.

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.

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.

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.