Carnival Corp is very confident that it will start cruising again in US waters before the end of the year, despite continuing to face unprecedented financial losses amid Covid-19.
The Arnold Donald-led owner of about 90 ships on Thursday reiterated a $2.86bn deficit for the third quarter in an official earnings release, having warned of this result three weeks ago in a preliminary report.
Carnival's latest quarterly result falls well short of a $1.78bn profit for the same quarter in 2019.
It also resulted in a $3.69 loss per share, missing analysts' expectations of a $2.20 loss per share.
This latest "business update" marks the third consecutive quarter of losses for the New York-listed cruise behemoth, which saw deficits of $781m and $4.3bn for the first two three-month periods of 2020.
Losses for the first nine months of 2020 totalled $8.01bn versus a $2.57bn profit for the same period last year.
Back in US waters before 2021
Chief executive Donald is nevertheless almost completely certain that US voyages will resume before 2021, despite the deep losses and US Centers for Disease Control and Prevention's no-sail order getting extended to the end of this month.
"At this time, we have every reason to be optimistic that we will be sailing in the US before the year ends," he told analysts on Thursday during a third-quarter earnings call.
Carnival has already put a couple of ships on the water last month, offering limited Costa Cruises itineraries in the Mediterranean on the 2,826-berth Costa Deliziosa (built 2010) and the 4,927-berth Costa Diadema (built 2014).
The Miami-based company has said that it will also resume cruises for German brand AIDA Cruises in November but plans to keep its vessels away from South and Central America, where it has sailed for seven decades.
Donald said Carnival expects to be sailing in US waters before next year because the Costa itineraries have received positive customer feedback and the company has been developing very stringent Covid-19 safety protocols.
Analysts questioned Donald's confidence in a US return to sailing because they say the upcoming US election and passengers' possible reluctance to board virus-prone ships may hurt demand.
Pent-up demand
Donald remained unwavering in his conviction, saying people cannot wait to cruise again.
"Just keep in mind, we have pent-up demand from people who are very anxious to cruise," he said.
He said that the ships will not be brought back to sailing all at once, but robust bookings for the end of 2020 and all of 2021 underline that strong demand.
Carnival is still unsure, however, when it will return its entire fleet of about 90 ships to roaming the high seas again.
"Currently, the company is unable to predict when the entire fleet will return to normal operations, and as a result, unable to provide an earnings forecast," it said in a statement.
"The pause in guest operations continues to have a material negative impact on all aspects of the company's business, including the company's liquidity, financial position and results of operations."
As a result, Carnival expects to post deficits for the fourth quarter and fiscal year ended 30 November as it wrestles with a monthly cash-burn rate of $770m, although this is expected to come in at $530m during the last three months of 2020.
Carnival currently has $8bn in liquidity to keep itself afloat in a zero-revenue environment through taking on billions of dollars in debt and offering millions of company shares.
