Carnival CEO Arnold Donald Upbeat Despite Q4 Loss
Carnival Corporation on Monday announced it suffered a U.S. GAAP (Generally Accepted Accounting Principles) loss of $2.2 billion and an adjusted net loss of $1.9 billion for the fourth quarter of 2020.
It was not unexpected, of course, as the coronavirus pandemic has shuttered the cruise line industry for more than 10 months now.
“We have the liquidity to make it through 2021 even with zero revenue,” Donald said on an earnings call with investors and media.
Carnival has $9.5 billion in cash on hand, $1.3 billion more than it had at the end of the third quarter, as well as strong bookings for the second half of this year.
“We believe we’re well-positioned to take advantage of that pent-up demand (for cruising),” the CEO said.
Cash burn rate in the fourth quarter of 2020 was slightly better than expected due to the timing of capital expenditures. Also giving the company optimism has been the accelerated removal of 19 less efficient ships, 15 of which have already left the fleet.
Cumulative advanced bookings for the first half of 2022 are ahead of 2019, despite minimal advertising or marketing.
“2020 has proven to be a true testament to the resilience of our company,” Donald said. “We took aggressive actions to implement and optimize a complete pause in our guest cruise operations across all brands globally, and developed protocols to begin our staggered resumption, first in Italy for our Costa brand, then followed by Germany for our AIDA brand. We are now working diligently towards resuming operations in Asia, Australia, the UK and the U.S. over the course of 2021. With the aggressive actions we have taken, managing the balance sheet and reducing capacity, we are well-positioned to capitalize on pent-up demand and to emerge a leaner, more efficient company, reinforcing our industry-leading position.”
Donald also touched on other topics, including:
– The Vaccines. Asked whether Carnival would require crew and/or passengers to prove they have taken the vaccine, Donald said, “The whole vaccine thing is at the beginning. We’re monitoring it and we’ll let it evolve over time and we’ll make a determination as things evolve.”
– Regulatory Approval. Asked to ballpark regulatory approval to sail again, Donald wryly noted that “I learned a long time ago, never try to predict regulatory anything.”
– Cuba. Asked whether he thought President-Elect Joe Biden will open travel to Cuba as President Obama did, only to have it undermined by President Trump, Donald would only say “We’ll see what happens with the incoming administration.”