10-QPeriod: Q3 FY2022

CARNIVAL CORP Quarterly Report for Q3 Ended Aug 31, 2022

Filed September 30, 2022For Securities:CCL

Summary

Carnival Corporation & plc (CCL) reported a significant revenue recovery for the three and nine months ended August 31, 2022, driven by the substantial resumption of guest cruise operations, with 93% of capacity serving guests by the end of the period. Total revenues increased by $3.8 billion and $7.7 billion, respectively, compared to the prior year, reflecting higher occupancy and increased ship deployment. Despite the revenue surge, the company continued to incur net losses, albeit reduced compared to the prior year. The nine-month net loss was $4.5 billion, a decrease from $6.9 billion in 2021. Key cost drivers included increased operating expenses related to the restart of operations, higher fuel costs, and ongoing inflation and supply chain challenges. The company maintains substantial liquidity, with $7.4 billion available as of August 31, 2022, and expects sufficient liquidity for at least the next twelve months. However, the company faces significant debt obligations and is actively managing its liquidity and financial covenants.

Financial Highlights

51 data points
Beta

Revenue

$4.30B

21.5% Gross Margin

Net Income

-$770.00M

-17.9% Net Margin

EPS (Diluted)

$-0.65

Total Assets

$51.92B

Cash & Equivalents

$7.07B

Free Cash Flow

-$882.00M

Financial Statements
Beta
Revenue$4.30B
Cost of Revenue$3.38B
Gross Profit$926.00M
SG&A Expenses$625.00M
Operating Expenses$4.58B
Operating Income-$279.00M
Interest Expense$422.00M
Net Income-$770.00M
EPS (Basic)$-0.65
EPS (Diluted)$-0.65
Shares Outstanding (Basic)1.19B
Shares Outstanding (Diluted)1.19B

Key Highlights

  • 1Revenue increased significantly due to the resumption of cruise operations, with 93% of capacity back in service by August 31, 2022.
  • 2Despite revenue growth, the company reported net losses for both the three-month ($770 million) and nine-month ($4.5 billion) periods ending August 31, 2022.
  • 3Operating costs and expenses rose substantially due to restart-related expenses, higher fuel prices, inflation, and supply chain disruptions.
  • 4Total debt remains substantial at $34.1 billion (net of issuance costs), with significant maturities upcoming in 2023 and 2024.
  • 5The company ended the period with $7.4 billion in liquidity, providing confidence in meeting obligations for at least the next twelve months.
  • 6Customer deposits increased to $4.5 billion, reflecting strong advance bookings for future cruises.
  • 7The company is actively managing its financial covenants and has secured waivers for certain interest coverage requirements through February 2024.

Frequently Asked Questions

The primary driver of Carnival's revenue recovery is the substantial resumption of guest cruise operations. By August 31, 2022, 93% of the company's capacity was serving guests, a significant increase from the prior year, leading to higher passenger ticket revenues and onboard spending.

No, Carnival Corporation & plc is not yet profitable. The company reported net losses for both the three-month period ($770 million) and the nine-month period ($4.5 billion) ending August 31, 2022. While the net loss has decreased compared to the prior year, ongoing operational costs and expenses continue to impact profitability.

Carnival has a substantial debt load totaling $34.1 billion (net). The company is managing this by addressing upcoming maturities well in advance, obtaining financial covenant amendments or waivers as needed, and leveraging its available liquidity. They also issued $3.3 billion in long-term debt and repaid $1.1 billion during the nine months ended August 31, 2022, to manage their debt profile.

Carnival reported strong liquidity with $7.4 billion available as of August 31, 2022, including cash and available borrowings under their revolving credit facility. They also have additional undrawn export credit facilities. Management has concluded that they have sufficient liquidity to satisfy their obligations for at least the next twelve months.