CARNIVAL CORPORATION & PLC PROVIDES THIRD QUARTER 2022 BUSINESS UPDATE

MIAMI, Sept. 30, 2022 /PRNewswire/ — Carnival Company & plc (NYSE/LSE: CCL; NYSE: CUK) supplies third quarter 2022 enterprise replace.

• U.S. GAAP web lack of $770 million and adjusted web lack of $688 million for the third quarter of 2022.
• Adjusted EBITDA for the third quarter of 2022 was over $300 million, turning optimistic for the primary time for the reason that resumption of visitor cruise operations and marking a big milestone.
• Income elevated by almost 80% within the third quarter of 2022 in comparison with second quarter 2022, reflecting continued sequential enchancment.
• Occupancy within the third quarter of 2022 elevated 15 proportion factors from the prior quarter.
• Because the announcement of the corporate’s relaxed protocols in mid-August, aligning the corporate in the direction of land-based trip options, reserving volumes for all future sailings are significantly greater than sturdy 2019 ranges.
• Third quarter 2022 ended with $7.4 billion of liquidity, together with money and borrowings obtainable beneath the corporate’s revolving credit score facility.

Carnival Company & plc’s Chief Govt Officer Josh Weinstein commented, “The well-being of the Caribbean area, Florida and different states nonetheless within the path of Hurricane Ian is essential to us. On behalf of Carnival Company, I wish to lengthen our deepest concern for these affected by Hurricane Ian and Fiona, a few of whom are our personal workers, journey agent companions, vacation spot communities and constant visitors.”

Weinstein famous, “Throughout our third quarter our enterprise continued its optimistic trajectory, attaining over $300 million of adjusted EBITDA and reaching almost 90% occupancy on our August sailings. We’re persevering with to shut the hole to 2019 as we progress by way of the 12 months, constructing occupancy on greater capability and decrease unit prices.”

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Weinstein continued, “Since saying the relief of our protocols final month, we’ve seen a significant enchancment in reserving volumes and at the moment are working significantly forward of sturdy 2019 ranges. We count on to additional capitalize on this momentum with renewed efforts to generate demand. We’re targeted on delivering important income progress over the long-term, whereas benefiting from near-term techniques to shortly seize worth and bookings within the interim.”

Weinstein added, “With a remodeled fleet, an unmatched portfolio of properly acknowledged manufacturers, unparalleled scale in an under-penetrated trade and an extremely proficient world crew, we’ve the flexibility to drive sturdy income progress by way of pricing enhancements over time. We consider this can present important free money move and speed up our return to sturdy profitability and funding grade credit score scores.”

Third Quarter 2022 Outcomes and Statistical Info

• Income elevated by almost 80% within the third quarter of 2022 in comparison with second quarter 2022, reflecting continued sequential enchancment. For the cruise segments, income per passenger cruise day (“PCD”) for the third quarter of 2022 decreased in comparison with a powerful 2019.
• Onboard and different income per PCD for the third quarter of 2022 elevated considerably in comparison with a powerful 2019.
• PCDs for the third quarter of 2022 had been 17.7 million, representing a 55% enhance from the prior quarter.
• Occupancy within the third quarter of 2022 elevated 15 proportion factors from the prior quarter.
• Accessible decrease berth days (“ALBD”) for the third quarter of 2022 had been 21.0 million, which represents 92% of complete fleet capability, rising from 74% within the second quarter of 2022.
• Adjusted EBITDA for the third quarter of 2022 was over $300 million, turning optimistic for the primary time for the reason that resumption of visitor cruise operations and marking a big milestone.

Whole buyer deposits had been $4.8 billion as of August 31, 2022, approaching the $4.9 billion as of August 31, 2019, which was a report third quarter. New bookings through the third quarter of 2022 primarily offset the historic third quarter seasonal decline in buyer deposits ($0.3 billion decline within the third quarter of 2022 in comparison with $1.1 billion decline for a similar interval in 2019).

Visitor Cruise Operations

Weinstein famous, “With our return to visitor cruise operations primarily full, we at the moment are relentlessly targeted on driving high line progress and returning to sturdy profitability. We consider the strategic adjustments we’ve already made to our fleet leading to a youthful and extra environment friendly fleet, coupled with our current portfolio optimization efforts together with COSTA^® by CARNIVAL^®, will present sturdy tailwinds alongside our path to profitability.”

As of September 30, 2022, roughly 95% of the corporate’s capability is serving visitors. The corporate expects eight of its 9 manufacturers could have their complete fleet serving visitors by the tip of the fourth quarter of 2022. Given Costa Cruises’ important presence in Asia, notably China, which stays closed to cruising, the model continues to guage deployment choices and fleet optimization options past the beforehand introduced transfers of Costa Luminosa to Carnival Cruise Line in addition to Costa Venezia and Costa Firenze to the COSTA^® by CARNIVAL^® idea.

Based mostly on the evolving nature of COVID-19 and the corporate’s ongoing collaboration with native and nationwide public well being authorities, the corporate’s manufacturers proceed to responsibly calm down their COVID-19 associated protocols (“relaxed protocols”) aligning the corporate in the direction of land-based trip options. This usually consists of vastly diminished or eradicated testing necessities and considerably broadens the demand pool by welcoming unvaccinated visitors. These relaxed protocols usually turned efficient all through September and are topic to native vacation spot rules.

The corporate noticed a continuation of its 2022 sequential enchancment in adjusted cruise prices excluding gas per ALBD in fixed forex (see “Non-GAAP Monetary Measures” beneath) within the third quarter of 2022 and expects to see continued enchancment within the fourth quarter of 2022 with a low double-digit enhance as in comparison with the fourth quarter of 2019 pushed partly by greater promoting expense to drive 2023 income. Whereas the corporate’s year-to-date adjusted cruise prices excluding gas per ALBD throughout 2022 has benefited from the sale of smaller-less environment friendly ships and the supply of larger-more environment friendly ships, this profit is offset by a portion of its fleet being in pause standing for a part of the 12 months, restart associated bills, a rise within the variety of dry dock days, the price of sustaining enhanced well being and security protocols, inflation and provide chain disruptions. The corporate anticipates that many of those prices and bills will finish in 2022.

Given the seasonality of its enterprise, the corporate expects a web loss and breakeven to barely destructive adjusted EBITDA for the fourth quarter ending November 30, 2022. Having achieved over $300 million adjusted EBITDA within the third quarter, the corporate anticipates optimistic adjusted EBITDA for the second half of 2022 regardless of the seasonality of its enterprise and the rising funding in promoting to drive yields in 2023. Moreover, on a year-over-year foundation, the corporate expects enchancment in adjusted EBITDA and occupancy, with occupancy returning to historic ranges throughout 2023.

Bookings

Reserving volumes for all future sailings through the third quarter of 2022 noticed a continuation of the accelerated reserving volumes through the second quarter of 2022, closing the hole to sturdy 2019 ranges. Because the announcement of the corporate’s relaxed protocols in mid-August, aligning the corporate in the direction of land-based trip options, reserving volumes for all future sailings are significantly greater than sturdy 2019 ranges. (The corporate’s present reserving tendencies will probably be in comparison with reserving tendencies for 2019 sailings as it’s the newest full 12 months of visitor cruise operations.)

Cumulative advance bookings for the fourth quarter of 2022 are beneath the historic vary and at decrease costs, primarily attributable to future cruise credit (“FCCs”), as in comparison with 2019 sailings.

Cumulative advance bookings for full 12 months 2023 are barely above the historic common and at significantly greater costs, as in comparison with 2019 sailings, normalized for FCCs.

Financing and Capital Exercise 

Throughout the third quarter of 2022, the corporate accomplished a $1.15 billion public fairness providing of its widespread inventory. The corporate expects to make use of the online proceeds from the providing for common company functions, which may embody addressing 2023 debt maturities. As well as, the corporate invested $0.5 billion in capital expenditures, repaid $0.4 billion of debt principal and incurred $0.4 billion of curiosity expense, web through the quarter. The corporate ended the third quarter of 2022 with $7.4 billion of liquidity, together with money and borrowings obtainable beneath the revolving credit score facility.

Moreover, the corporate exchanged $339 million in mixture principal quantity of its excellent Convertible Senior Notes due 2023 (the “Present Notes”) for a similar quantity of Convertible Senior Notes due 2024 (the “New Notes”), extending maturities on the present price of 5.75%. The New Notes have the identical preliminary conversion worth because the Present Notes, representing no dilution to shareholders at scheduled maturity versus the Present Notes, the identical coupon and no upfront value to the corporate.

Sustainability

Carnival Chief Maritime Officer William Burke famous, “We just lately accomplished profitable pilots utilizing biofuels which exhibit continued innovation in our dedication to decarbonization. As well as, we’re working aggressively towards our 2030 carbon discount objectives by way of the know-how upgrades presently being rolled out, investing in port and vacation spot tasks and much more concentrate on itinerary optimization throughout the portfolio whereas realizing the good thing about our fleet optimization efforts, which mix to drive down our carbon footprint, gas consumption and price. This reinforces our dedication to sustaining excellence in compliance, defending the setting and the well being, security and well-being of our visitors, workers and the communities we contact and serve.”

AIDA Cruises and Holland America Line obtain milestones of their decarbonization methods by way of initiating use of biofuels

In July 2022, AIDA Cruises piloted its use of biofuels when AIDAprima turned the primary larger-scale cruise ship to be powered with a mix of marine biofuel, which is comprised of 100% sustainable uncooked supplies, and marine fuel oil. As well as, Holland America Line just lately accomplished two pilots on Volendam, one utilizing a mix of marine biofuel and one other utilizing 100% biofuel, changing into the primary larger-scale cruise ship to be powered 100% by biofuel. The licensed biofuels utilized in these pilots supply environmental advantages in comparison with utilizing fossil fuels alone, by way of their lifecycle CO2 reductions. They can be utilized in presently put in ship important engines with out modifications to the engine or gas infrastructure, together with on ships already in service.

International fleet upgrades will enhance vitality and gas effectivity and help sustainability objectives

In August 2022, the corporate introduced the worldwide rollout of Service Energy Packages, a complete set of know-how upgrades, which will probably be carried out over the following a number of years throughout a portion of the fleet. These upgrades embody the next components designed to scale back each gas utilization and greenhouse fuel emissions whereas additionally contributing to value financial savings:

• Complete upgrades to every ship’s lodge HVAC techniques
• Technical techniques upgrades on every ship
• State-of-the-art LED lighting techniques
• Distant monitoring and upkeep of vitality utilization and efficiency

The Service Energy Package deal upgrades are a part of the corporate’s ongoing vitality effectivity funding program, during which the corporate has invested over $350 million in vitality effectivity enhancements since 2016, and are anticipated to additional enhance vitality financial savings and scale back gas consumption throughout the corporate’s 9 cruise manufacturers. Upon completion, these upgrades are anticipated to generate roughly $150 million in annual gas value financial savings by delivering a median of 5-10% gas financial savings per ship. These investments, together with the corporate’s fleet optimization and just lately launched itinerary opinions, are anticipated to drive a ten% discount in gas consumption per ALBD in 2023, together with a 9% discount in carbon emissions per ALBD on an annualized foundation, each as in comparison with 2019. This multi-year program may also contribute to carbon emission reductions in 2024 and past, in the end advancing the corporate’s 2030 sustainability objectives.

Different Latest Highlights 

• Seabourn took supply of Seabourn Enterprise, the road’s first purpose-built ultra-luxury expedition ship.
• Carnival Cruise Line’s reserving exercise for Monday, August 15 almost doubled the extent for the equal day in 2019 after saying the relaxed protocols.
• Carnival Cruise Line acquired the 2022 Seatrade Cruise Award within the Funding in Folks Award class for his or her DEI, Studying and Group initiatives.
• Carnival continues to steer in vacation spot port improvement together with Carnival Cruise Line’s just lately introduced financial alternatives for its Grand Bahama Cruise Port Improvement, which is opening in late 2024 and can generate an estimated 1,000 native jobs.
• Holland America Line launched its “See the World from Your Doorstep” marketing campaign, highlighting the cruise line’s management in longer length round-trip cruises from U.S. homeports, because it sees a better curiosity for these sorts of voyages.
• Carnival Company launched its 12^th annual sustainability report, detailing the important thing initiatives and progress made in 2021 towards its 2030 sustainability objectives and 2050 aspirations.

Chosen Forecast Info

Accessible Decrease Berth Days (“ALBDs”)

The corporate’s ALBD forecast consists of contracted new ships, introduced gross sales and deliberate restart schedule.

Gas

The corporate’s gas consumption forecast for the rest of the 12 months is 724 thousand metric tons. The blended spot worth for gas is presently $675 per metric ton.

Depreciation and Amortization

The corporate’s depreciation and amortization forecast for the rest of the 12 months is $0.6 billion. The 2022 full 12 months forecast, which incorporates year-to-date actuals, is $2.3 billion.

Curiosity Expense, Internet of Capitalized Curiosity

The corporate’s curiosity expense, web of capitalized curiosity forecast for the rest of the 12 months is $0.4 billion. The 2022 full 12 months forecast, which incorporates year-to-date actuals, is $1.6 billion.

Excellent Debt Maturities

As of August 31, 2022, the corporate’s excellent debt maturities are as follows:

Discuss with Monetary Info inside the Investor Relations part of the company web site for additional particulars on its Debt Maturities, which will probably be obtainable upon submitting the Type 10-Q: https://www.carnivalcorp.com/financial-information/supplemental-schedules

Capital Expenditures

The corporate’s annual capital expenditure forecast, which incorporates year-to-date actuals for 2022, is as follows:

Convention Name 

The corporate has scheduled a convention name with analysts at 10:00 a.m. EDT (3:00 p.m. BST) right this moment to debate its enterprise replace. This name may be listened to stay, and extra data may be obtained, through Carnival Company & plc’s web site at www.carnivalcorp.com and www.carnivalplc.com. 

Carnival Company & plc is likely one of the world’s largest leisure journey firms with a portfolio of 9 of the world’s main cruise traces. With operations in North America, Australia, Europe and Asia, its portfolio options – Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard.

Further data may be discovered on www.carnivalcorp.com, www.carnivalsustainability.com, www.carnival.com, www.princess.com, www.hollandamerica.com, www.pocruises.com.au, www.seabourn.com, www.costacruise.com, www.aida.de, www.pocruises.com and www.cunard.com.

Cautionary Observe Regarding Components That Might Have an effect on Future Outcomes

A few of the statements, estimates or projections contained on this doc are “forward-looking statements” that contain dangers, uncertainties and assumptions with respect to us, together with some statements regarding future outcomes, operations, outlooks, plans, objectives, status, money flows, liquidity and different occasions which haven’t but occurred. These statements are meant to qualify for the protected harbors from legal responsibility supplied by Part 27A of the Securities Act of 1933 and Part 21E of the Securities Trade Act of 1934, as amended. All statements aside from statements of historic info are statements that may very well be deemed forward-looking. These statements are primarily based on present expectations, estimates, forecasts and projections about our enterprise and the trade during which we function and the beliefs and assumptions of our administration. We now have tried, every time doable, to determine these statements through the use of phrases like “will,” “might,” “may,” “ought to,” “would,” “consider,” “relies upon,” “count on,” “objective,” “aspiration,” “anticipate,” “forecast,” “mission,” “future,” “intend,” “plan,” “estimate,” “goal,” “point out,” “outlook,” and comparable expressions of future intent or the destructive of such phrases.

Ahead-looking statements embody these statements that relate to our outlook and monetary place together with, however not restricted to, statements concerning:

As a result of forward-looking statements contain dangers and uncertainties, there are lots of components that might trigger our precise outcomes, efficiency or achievements to vary materially from these expressed or implied by our forward-looking statements. This notice accommodates essential cautionary statements of the recognized components that we take into account may materially have an effect on the accuracy of our forward-looking statements and adversely have an effect on our enterprise, outcomes of operations and monetary place. Moreover, many of those dangers and uncertainties are presently, and sooner or later might proceed to be, amplified by COVID-19. It’s not doable to foretell or determine all such dangers. There could also be further dangers that we take into account immaterial or that are unknown. These components embody, however should not restricted to, the next:

• COVID-19 has had, and is predicted to proceed to have, a big influence on our monetary situation and operations. The present, and unsure future, influence of COVID-19, together with its impact on the flexibility or want of individuals to journey (together with on cruises), is predicted to proceed to influence our outcomes, operations, outlooks, plans, objectives, status, litigation, money flows, liquidity, and inventory worth.
• Occasions and circumstances all over the world, together with conflict and different navy actions, comparable to the present invasion of Ukraine, inflation, greater gas costs, greater rates of interest and different common considerations impacting the flexibility or want of individuals to journey, have led, and should sooner or later lead, to a decline in demand for cruises, impacting our working prices and profitability.
• Incidents regarding our ships, visitors or the cruise trade have up to now and should, sooner or later, influence the satisfaction of our visitors and crew and result in reputational injury.
• Modifications in and non-compliance with legal guidelines and rules beneath which we function, comparable to these referring to well being, setting, security and safety, information privateness and safety, anti-corruption, financial sanctions, commerce safety and tax have up to now and should, sooner or later, result in litigation, enforcement actions, fines, penalties and reputational injury.
• Components related to local weather change, together with evolving and rising rules, rising world concern about local weather change and the shift in local weather acutely aware consumerism and stakeholder scrutiny, and rising frequency and/or severity of adversarial climate circumstances may adversely have an effect on our enterprise.
• Incapability to fulfill or obtain our sustainability associated objectives, aspirations, initiatives, and our public statements and disclosures concerning them, might expose us to dangers which will adversely influence our enterprise.
• Breaches in information safety and lapses in information privateness in addition to disruptions and different damages to our principal workplaces, data know-how operations and system networks and failure to maintain tempo with developments in know-how might adversely influence our enterprise operations, the satisfaction of our visitors and crew and should result in reputational injury.
• The lack of key workers, our incapability to recruit or retain certified shoreside and shipboard workers and elevated labor prices may have an adversarial impact on our enterprise and outcomes of operations.
• Will increase in gas costs, adjustments within the varieties of gas consumed and availability of gas provide might adversely influence our scheduled itineraries and prices.
• We depend on provide chain distributors who’re integral to the operations of our companies. These distributors and repair suppliers are additionally affected by COVID-19 and could also be unable to ship on their commitments which may influence our enterprise.
• Fluctuations in overseas forex trade charges might adversely influence our monetary outcomes.
• Overcapacity and competitors within the cruise and land-based trip trade might result in a decline in our cruise gross sales, pricing and vacation spot choices.
• Incapability to implement our shipbuilding packages and ship repairs, upkeep and refurbishments might adversely influence our enterprise operations and the satisfaction of our visitors.

The ordering of the danger components set forth above is just not meant to replicate our indication of precedence or chance.

Ahead-looking statements shouldn’t be relied upon as a prediction of precise outcomes. Topic to any persevering with obligations beneath relevant legislation or any related inventory trade guidelines, we expressly disclaim any obligation to disseminate, after the date of this doc, any updates or revisions to any such forward-looking statements to replicate any change in expectations or occasions, circumstances or circumstances on which any such statements are primarily based. Ahead-looking and different statements on this doc may deal with our sustainability progress, plans and objectives (together with local weather change and environmental-related issues). As well as, historic, present and forward-looking sustainability-related statements could also be primarily based on requirements for measuring progress which can be nonetheless creating, inner controls and processes that proceed to evolve, and assumptions which can be topic to vary sooner or later.

The resumption of visitor cruise operations has impacted the comparability of all elements of the corporate’s enterprise.

Non-GAAP Monetary Measures

We use adjusted web revenue (loss) and adjusted EBITDA as non-GAAP monetary measures of the corporate’s monetary efficiency. We use adjusted cruise prices per ALBD and adjusted cruise prices excluding gas per ALBD as non-GAAP monetary measures of our cruise segments’ monetary efficiency. These non-GAAP monetary measures are supplied together with U.S. GAAP cruise prices per ALBD and U.S. GAAP web revenue (loss).

We consider that beneficial properties and losses on ship gross sales, impairment prices, beneficial properties and losses on debt extinguishments, restructuring prices and sure different beneficial properties and losses should not a part of our core working enterprise and should not a sign of our future earnings efficiency. Due to this fact, we consider it’s extra significant for this stuff to be excluded from our web revenue (loss), and accordingly, we current adjusted web revenue (loss) excluding these things as further data to traders.

We consider that the presentation of adjusted EBITDA supplies further data to traders about our working profitability by excluding sure beneficial properties and bills that we consider should not a part of our core working enterprise and should not a sign of our future earnings efficiency in addition to excluding curiosity, taxes and depreciation and amortization. As well as, we consider that the presentation of adjusted EBITDA supplies further data to traders about our potential to function our enterprise in compliance with the covenants set forth in our debt agreements. We outline adjusted EBITDA as adjusted web revenue (loss) adjusted for (i) curiosity, (ii) taxes and (iii) depreciation and amortization. There are materials limitations to utilizing adjusted EBITDA. Adjusted EBITDA doesn’t consider sure important objects that straight have an effect on our web revenue (loss). These limitations are finest addressed by contemplating the financial results of the excluded objects independently, and by contemplating adjusted EBITDA together with web revenue (loss) as calculated in accordance with U.S. GAAP.

Adjusted cruise prices per ALBD and adjusted cruise prices excluding gas per ALBD allow us to separate the influence of predictable capability or ALBD adjustments from worth and different adjustments that have an effect on our enterprise. We consider these non-GAAP measures present helpful data to traders and expanded perception to measure our value efficiency as a complement to our U.S. GAAP consolidated monetary statements. Adjusted cruise prices per ALBD and adjusted cruise prices excluding gas per ALBD are the measures we use to watch our potential to manage our cruise segments’ prices relatively than cruise prices per ALBD. We exclude our most vital variable prices, that are journey agent commissions, value of air and different transportation, sure different prices which can be straight related to onboard and different revenues and credit score and debit card charges, in addition to gas expense to calculate adjusted cruise prices with out gas. Considerably all of our adjusted cruise prices excluding gas are largely fastened, apart from the influence of fixing costs as soon as the variety of ALBDs has been decided.

The presentation of our non-GAAP monetary data is just not meant to be thought of in isolation from, as substitute for, or superior to the monetary data ready in accordance with U.S. GAAP. It’s doable that our non-GAAP monetary measures will not be precisely akin to the like-kind data offered by different firms, which is a possible threat related to utilizing these measures to match us to different firms.

Fixed Foreign money

Our operations primarily make the most of the U.S. greenback, Australian greenback, euro and sterling as purposeful currencies to measure outcomes and monetary situation. Useful currencies aside from the U.S. greenback topic us to overseas forex translational threat. Our operations even have revenues and bills which can be in currencies aside from their purposeful forex, which topic us to overseas forex transactional threat.

We report adjusted cruise prices excluding gas per ALBD on a “fixed forex” foundation assuming the 2022 intervals’ forex trade charges have remained fixed with the 2019 intervals’ charges. These metrics facilitate a comparative view for the adjustments in our enterprise in an setting with fluctuating trade charges.

Fixed forex reporting removes the influence of adjustments in trade charges on the interpretation of our operations plus the transactional influence of adjustments in trade charges from revenues and bills which can be denominated in a forex aside from the purposeful forex.

Examples:

• The interpretation of our operations with purposeful currencies aside from U.S. greenback to our U.S. greenback reporting forex ends in decreases in reported U.S. greenback revenues and bills if the U.S. greenback strengthens in opposition to these foreign exchange and will increase in reported U.S. greenback revenues and bills if the U.S. greenback weakens in opposition to these foreign exchange.
• Our operations have income and expense transactions in currencies aside from their purposeful forex. If their purposeful forex strengthens in opposition to these different currencies, it reduces the purposeful forex revenues and bills. If the purposeful forex weakens in opposition to these different currencies, it will increase the purposeful forex revenues and bills.

SOURCE Carnival Company & plc