Carnival Corporation & plc, the world’s listed cruise shipping group, has reported a net loss of $.4 billion for three months to 31 May, the second quarter of its financial year, with a non-cash impairment charge accounting for $2.0 billion of the loss, the company said in a statement.
“The company's guest cruise operations have been in a pause for a majority of the second quarter. In addition, the company is unable to definitively predict when it will return to normal operations. As a result, the company is currently unable to provide an earnings forecast,” Carnival said.
“The pause in guest operations is continuing to have material negative impacts on all aspects of the company's business. The longer the pause in guest operations continues the greater the impact on the company's liquidity and financial position. The company expects a net loss on both a U.S. GAAP and adjusted basis for the second half of 2020,” the company continued.
Although the impairment charge does not affect the group’s cash position, it does reduce shareholder’s equity and thus weakens the group’s balance sheet at a time when borrowing is increasing heavily to ensure the group has adequate liquidity to weather the current situation. “The company is working to arrange additional financial covenant waivers and additional debt holiday agreements deferring principal repayments of approximately $300 million through March 2021,” Carnival said.
The company said its cash burn rate in the was generally in line with the previously disclosed expectation. “Second quarter 2020 ended with $7.6 billion of available liquidity, and the company expects to further enhance future liquidity, including through refinancing scheduled debt maturities. In addition, the company has $8.8 billion of committed export credit facilities that are available to fund ship deliveries originally planned through 2023.,” Carnival said.
Total customer deposits balance at May 31, 2020 was $2.9 billion, including $475 million related to cruises during the second half of 202, the company noted.
