Carnival beats adjusted net loss guidance after record Q2 revenue

Cruise giant Carnival continued to recover from the lows of the Covid-19 pandemic on Monday, as it reported a net loss of $407m for the second quarter.

The company said that translated to a diluted loss per share of 32 US cents.

However, its adjusted net loss stood at $395m, or 31 cents per share, surpassing the higher end of its March guidance range of $425m to $525m.

Additionally, its adjusted EBITDA for the quarter totalled $681m, aligning with the March guidance range of $600m to $700m.

Carnival said it achieved record-breaking second-quarter revenue of $4.9bn, which it put down to a sustained acceleration of demand, resulting in the highest number of bookings ever recorded for all future sailings.

Furthermore, total customer deposits reached an all-time high of $7.2bn as at 31 May – a 26% increase compared to the prior quarter, and surpassing the previous record of $6bn set in May 2019.

Carnival also described a strong liquidity position, ending the second quarter with $7.3b in liquidity after the prepayment of more than $1bn in near-term variable-rate debt.

In addition to the positive financial results, Carnival took the wraps of its ‘SEA Change Program’, which it said was designed to achieve key performance targets over a three-year period to 2026.

“We reached a meaningful inflection point for revenue this quarter, with net yields surpassing 2019's strong levels, and we achieved positive operating income, cash from operations and adjusted free cash flow,” said chief executive officer Josh Weinstein.

“We are already executing on our strategy to grow revenue by taking up ticket prices, even while maintaining record on-board spending levels, building occupancy and growing capacity.

“Based on continued strength in pricing, we delivered outperformance in the second quarter and raised our expectation for revenue in the second half, which coupled with the interest expense benefit we are capturing from deleveraging will bring another $275m to the bottom line for the year.”

Weinstein noted that with bookings and customer deposits hitting all-time highs, Carnival was “clearly” gaining momentum on an upward trajectory.

“We are focused on the durable revenue growth and margin improvement that will deliver on our SEA Change Program and propel us on the path to delevering and investment grade leverage metrics.”

At 1508 BST, shares in Carnival were down .53% in London at 1,025.5p.

Reporting by Josh White for Sharecast.com.