Carnival reports $2.9 billion loss, still assessing testing options for Nov. 1 cruises
Carnival Corporation reported a net loss of $2.9 billion, or $3.69 earnings per share, for the three months ending in August 2020.
In a Thursday filing to the Securities and Exchange Commission, the company said it had a cash burn rate during the three-month period of $770 million as it nears the end of its seventh month without cruises in the U.S., its most lucrative market. The company said it is preparing to restart cruises in the U.S. as soon as Nov. 1 and has $8 billion in cash and alternate financing on hand, including $2.4 billion in the form of customer deposits.
“At this time we have every reason to be optimistic that we will be sailing in the U.S. by the year end,” said CEO Arnold Donald on an investor call. The company has already restarted cruises in Italy on its Costa brand ships, available only to Italians.
The cruise industry first shut down on March 14 amid COVID-19 outbreaks on several ships. Since then, the U.S. Centers for Disease Control and Prevention has repeatedly extended its ban on cruises called a “no-sail order.” Most recently, last week the agency planned to extend the ban through February 2021 but was overruled by the White House. The current ban is in effect through Oct. 31.
Carnival Cruise Line, one of Carnival Corp.’s nine cruise brands, announced this week it plans to begin cruising from PortMiami and Port Canaveral on Nov. 1. Chief Financial Officer David Bernstein said the company saw a spike in bookings for those cruises after the announcement, which is proof, he said, of pent-up demand.
“We think we’ll be in fine shape going forward,” he said.
The industry has committed to what it’s calling “100% testing” of passengers before boarding, but is not offering specifics about what testing will be used, when it will be done, and whether the passenger or the companies will pay for it.
Donald said that PCR testing – the most reliable – is a good option that passengers can access for free with turnaround times within five days.
“We’re not sailing yet here in the U.S. and so the testing is continuing to evolve, availability of testing is evolving,” said Donald. We’ll finalize as we get closer.”
Donald said that expiration of the CDC’s no-sail order expires without an extension constitutes formal approval from the agency that cruising can begin again.