Financial data show that Carnival Cruises’ total operating income in the second quarter of 2020 was US$740 million, a year-on-year decrease of 84.7%, and a decrease of 84.55% month-on-month; operating profit was a negative US$2.813 billion , A year-on-year decrease of 646.21% and a month-on-month decrease of 15727.78%; pre-tax profit was a loss of US$4.385 billion, and net profit was a loss of US$4.374 billion, a year-on-year decrease of 1069.84% and a month-on-month decrease of 460.05%.
Carnival Cruises said in its financial report that the New Coronary Pneumonia epidemic will directly or indirectly affect the company’s business, operations, operating results and financial status, including the company’s reputation for goodwill and trademarks Stock prices, ship impairments, the recoverability of trade and revenue bills, and pending litigation reserves are all highly dependent on uncertain future developments.
Carnival Cruise Line pointed out that the suspension of tourist operations continues to have a significant negative impact on all aspects of the company’s business. The longer the suspension lasts, the greater the impact on the company’s liquidity and financial situation. Carnival Cruise Line continues to anticipate that, in accordance with US GAAP and the adjusted basis, there will be a net loss in the second half of 2020.
In mid-March this year, affected by the new crown epidemic, the Carnival Cruise Line suspended its tourist cruise operations. The “Diamond Princess”, “Supreme Princess”, “Ruby Princess” and “Coral Princess” cruises, which had previously received much attention due to the new coronavirus pneumonia epidemic, are the fleet of the cruise brand Princess Cruises of the Carnival Cruises Group.
Carnival Cruises hopes that, with continued cooperation between the government and the health department, tourist cruise operations will be resumed in stages. Carnival Cruise said in its announcement on July 10 that it expects certain brands and ships to resume service over time.
Among them, Aida Cruises (AIDA), a German airline cruise brand under Carnival Cruises, previously announced that it will resume the passengers of its three cruise ships from German ports starting in August 2020 Operation. As a result, AIDA will be the first cruise brand to resume passenger ship operations among the nine cruise brands under Carnival Cruises.
In terms of cash, Carnival Cruises disclosed that as of May 31, 2020, the company’s cash and cash equivalents had a closing balance of $6.896 billion. Earlier, Carnival Cruises disclosed in its first-quarter performance report that as of February 29, the company had a total of 11.7 billion US dollars of working capital, which will be used for ship delivery this year.
However, judging from the current situation, on the one hand, the delivery of some new ships will be affected, delaying delivery. At the same time, Carnival Cruise Line also disposed 13 expected ships. Carnival Cruise Line will therefore reduce capacity.
Carnival Cruise Line predicts that the future capacity will be slowed down by the phased return of its ships, the cancellation of fleet capacity and the delay in the delivery of new ships. Earlier, Carnival Cruise Line announced that the company plans to accelerate the dismantling of ships originally expected to be sold in the following years in fiscal 2020. In June 2020, Carnival Cruises sold one ship and reached agreement on the disposal of five ships, as well as a preliminary agreement on three ships, which are expected to leave the fleet within the next 90 days. These agreements are supplementary agreements for the sale of four ships announced before fiscal 2020. In total, the 13 ships that will leave the fleet will reduce the existing capacity of Carnival Cruise Line by nearly 9%.
Carnival Cruise Line expects that of the 9 ships originally scheduled for delivery in FY 2020 and FY 2021, only 5 will be delivered before the end of FY 2021. In addition, the company also expects that ships originally scheduled for delivery in fiscal years 2022 and 2023 will be delivered later.
Arnold Donald, President and Chief Executive Officer of Carnival Cruises, said: “We have been transitioning the fleet to a prolonged suspension and adjusted the shore The scale of the business. We have reduced our operating costs by more than US$7 billion annually and reduced our capital expenditures by more than US$5 billion over the next 18 months.”
At the same time, Donald said that Carnival Cruises has received more than $10 billion in additional liquidity to maintain the next full year of operations while maintaining additional flexibility, “We are actively delaying new assets while actively reducing assets. Delivery of the ship. Through consultations with medical experts and scientists around the world, we are informed of the way forward to serve the best interests of public health.”