Carnival Corporation provided a first quarter 2021 business update on Wednesday morning:

• U.S. GAAP net loss of $(2.0) billion and adjusted net loss of $(2.0) billion for the first quarter of 2021.
• First quarter 2021 ended with $11.5 billion of cash and short-term investments.
• Cash burn rate in the first quarter of 2021 was better than expected as the company said it has identified and implemented opportunities to optimize its monthly spend.
• Booking volumes for all future cruises during the first quarter of 2021 were approximately 90% higher than booking volumes during the fourth quarter of 2020.
• Cumulative advanced bookings for full year 2022 are ahead of a very strong 2019, despite minimal advertising or marketing.
• Six of the company’s nine brands are expected to resume limited guest cruise operations by this summer.
  • AIDA resumed guest cruise operations in March sailing in the Canary Islands.
  • Costa expects to resume guest cruise operations in May sailing to Italian ports.
  • P&O Cruises (UK), Cunard and Princess Cruises will each offer a series of UK cruises this summer.
  • Seabourn expects to resume guest cruise operations this summer sailing from Greece.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted: “We are focused on resuming operations as quickly as practical, while at the same time demonstrating prudent stewardship of capital and doing so in a way that serves the best interests of public health. Our highest responsibility and therefore our top priority is always compliance, environmental protection and the health, safety and well-being of everyone. Our portfolio of brands have clearly been an asset as we resume operations this summer with nine ships across six of our brands.”

Donald continued: “Throughout the pause we have been positioning Carnival Corporation to return to serving guests an operationally stronger company than we were before. With an exciting roster of six new, more efficient ships by December and with lower capacity from the exit of 19 less efficient ships, we expect to capitalize on pent-up demand and achieve significant cost improvement from the greater efficiency of our fleet, along with ongoing streamlining of shoreside operations.”

Update on Bookings

Donald added: “Booking volumes are accelerating. During the first quarter of 2021 they were approximately 90% higher than volumes during the fourth quarter of 2020 reflecting both the significant pent up demand and long-term potential for cruising.”

Cumulative advanced bookings for full year 2022 are ahead of a very strong 2019 as of March 21, 2021, according to a company press release.

The company highlights this level of bookings was achieved with minimal advertising and marketing.

Total customer deposits as of February 28, 2021 and November 30, 2020 were $2.2 billion, the majority of which are future cruise credits. During the quarter, customer deposits on new bookings essentially offset the impact of refunds provided. As of February 28, 2021, the current portion of customer deposits was $1.8 billion, of which $0.7 billion relates to bookings for the remainder of 2021.

Resumption of Guest Operations

The company said it is “uniquely positioned” for a phased resumption in cruise travel given its multiple brands which can each be restarted independently and tailored to the environment of their respective source market.

AIDA Cruises  resumed guest cruise operations in late March sailing in the Canary Islands. Costa Cruises expects to resume operations in May sailing to Italian ports. P&O Cruises (UK), Cunard and Princess Cruises will each offer a series of cruises this summer sailing around UK coastal waters with P&O Cruises (UK) kicking off the season in June followed by Cunard and Princess Cruises in July.

Seabourn also expects to resume guest cruise operations this summer sailing from Greece.

In addition, this summer Holland America Line and Princess Cruises expect to offer land-based vacation options for travelers to experience Alaska through a combination of tours, lodging and sightseeing.

Increasing Liquidity

Carnival Corporation & plc Chief Financial Officer David Bernstein noted: “We ended the first quarter with $11.5 billion in cash and short-term investments. At this time, we believe we have enough liquidity to get us back to full operations and we will be pursuing refinancing opportunities to reduce interest expense and extend maturities. We have successfully identified and implemented actions to optimize our monthly cash burn rate and we will continue to do so.”

The company’s monthly average cash burn rate for the first quarter of 2021 was $500 million, which was better than expected primarily due to the timing of capital expenditures.

The company expects the monthly average cash burn rate for the first half of 2021 to be approximately $550 million, which is better than previously expected, according to a press release. This is a result of the company’s efforts to optimize its monthly spend despite higher restart related spend.