Summary
Carnival Corporation & plc reported significant revenue declines in the three and six months ended May 31, 2021, as the company continued its phased resumption of cruise operations following the global pause due to COVID-19. While only a fraction of its fleet was operational, the company maintained substantial liquidity, ending the period with $9.3 billion in cash and short-term investments. Management stated they have sufficient liquidity to meet obligations for at least the next twelve months, supported by ongoing capital market transactions and cost-saving measures. Despite the operational challenges, Carnival secured waivers for certain debt covenants and has a clear roadmap for fleet reactivation, with over 50% of capacity expected to resume by the end of Q4 2021 and full fleet operation anticipated by Spring 2022. However, significant operational losses continued, and the company anticipates further net losses for the remainder of fiscal year 2021. Investors should note the substantial increase in debt, reflecting financing activities undertaken to navigate the pandemic's impact. While the company has taken steps to manage its debt profile and covenants, the path to profitability remains tied to the successful and sustained resumption of global cruise operations, alongside careful management of ongoing costs and potential future disruptions. The company also faces ongoing legal proceedings and cyber security concerns, which are being actively managed.
Financial Highlights
53 data points| Revenue | $50.00M |
| Cost of Revenue | $681.00M |
| Gross Profit | -$631.00M |
| SG&A Expenses | $417.00M |
| Operating Expenses | $1.67B |
| Operating Income | -$1.62B |
| Interest Expense | $437.00M |
| Net Income | -$2.07B |
| EPS (Basic) | $-1.83 |
| EPS (Diluted) | $-1.83 |
| Shares Outstanding (Basic) | 1.13B |
| Shares Outstanding (Diluted) | 1.13B |
Key Highlights
- 1Total revenues for the three months ended May 31, 2021, were $50 million, a 93% decrease from $740 million in the prior year period, reflecting the ongoing impact of the COVID-19 pandemic on cruise operations.
- 2Net loss for the three months ended May 31, 2021, was $2.07 billion, compared to a net loss of $4.37 billion in the same period of 2020. Diluted EPS was $(1.83) vs $(6.07).
- 3The company reported $7.07 billion in cash and cash equivalents and $2.20 billion in short-term investments as of May 31, 2021, totaling $9.27 billion in liquidity.
- 4Carnival successfully issued $3.5 billion in Senior Unsecured Notes in February 2021 and raised $996 million through a public offering of common stock, bolstering its financial position.
- 5The company has a clear plan for fleet resumption, with 42 ships (over 50% of capacity) expected to be operational by the end of the fourth quarter of 2021, and the full fleet anticipated to be back in operation by Spring 2022.
- 6Significant debt remains a key factor, with long-term debt totaling $25.97 billion and current portion of long-term debt at $1.71 billion as of May 31, 2021.
- 7The company obtained waivers for certain debt covenants, easing immediate compliance pressures, but future compliance remains dependent on operational recovery and financial performance.