Carnival Corp has finally achieved something it has not been able to do since the pandemic threw the entire cruise industry into unimaginable losses two years ago.
The New York-listed owner of 95 vessels has achieved positive cash flow as of April, meaning the company’s operations are making more money than spending it.
The world’s largest cruise ship owner posted $2.4bn in revenue against an operating deficit of $1.47bn for the second quarter, marking the first time that income has exceeded running costs since Covid-19 arrived.
A year ago, New York-listed Carnival reported $50m in second-quarter revenue versus $1.62bn in operating costs.
“With cash from operations turning positive and the company heading in the right direction, now is the time to transition leadership to the next generation,” chief executive Arnold Donald said in a statement.
Carnival’s chief executive since 2013 was referring to chief operations officer Josh Weinstein’s succession to CEO, which the Miami-based company announced in late April at Seatrade Cruise Global in Miami Beach.
“Josh Weinstein has the skill set ideally suited to take this company forward, including strong operating experience and in-depth industry knowledge cultivated over the past two decades,” Donald said in a statement.
“I am confident our positive momentum will continue under Josh’s leadership and I remain confident in the long-term future of our company.”
But Carnival is still not out of the woods yet financially, having posted a $1.8bn in red ink for the quarter against a $1.9bn loss a year earlier.
This resulted in a $1.61 loss per share that missed analyst consensus by $0.53 per share but improved upon the year-ago loss per share of $1.83.
This whopping shortfall represents the 10th consecutive quarter that the owner — and its peers Royal Caribbean Group and Norwegian Cruise Line Holdings — have suffered unprecedented losses at the hands of Covid-19.
Losses for the first half of 2022 came in at $3.73bn, compared to $4.05bn during the same period in 2022. The company’s current and long-term debt stands at $35.2bn.
But the company is slowly getting back on its feet and renewing its fleet as it reported 70% capacity on 90% of its fleet now back in service and bookings slowly creep back to pre-pandemic levels.
“We continue to build on our fleet optimization efforts by reallocating capacity in a highly differentiated way to strengthen return on invested capital across our portfolio,” Donald said.
“Upon returning to full operations, nearly a quarter of our capacity will consist of newly delivered ships, expediting our return to profitability.”