Carnival PLC shares suffered on Monday despite reporting record revenue and its net loss narrowing in its second quarter.
Shares in Carnival dropped by 12% at 974.80 pence in London on Monday.
In the three months ended May 31, the cruise operator recorded a net loss of $407 million, narrowing markedly from $1.83 billion a year prior. For the six months, Carnival’s net loss narrowed to $1.10 billion from $3.73 billion in the year prior.
The company said it recorded second quarter revenue of $4.91 billion, jumping from $1.83 billion a year prior. Carnival said this was achieved by an increase in passenger ticket revenue to $3.14 billion from $1.29 billion, and onboard ticket revenue rising to $1.77 billion from $1.12 billion the year before.
Chief Executive Officer Josh Weinstein said: ‘We reached a meaningful inflection point for revenue this quarter, with net yields surpassing 2019’s strong levels, and we achieved positive operating income, cash from operations and adjusted free cash flow.’
Carnival swung to an adjusted earnings before interest, tax, depreciation and amortisation for the second quarter of $681 million, from a loss of $928 million a year before.
Available lower berth days in this second quarter increased by 34% to 22.3 million, from 16.7 million.
ALBD is the standard passenger capacity metric used in the cruise industry.
Total operating expenses increased by 24% to $4.79 billion from $3.87 billion the year prior.
The company said that its total bookings made during the quarter reached an all-time high.
‘Booking volumes for the second quarter exceeded the first quarter’s booking volumes, which was the previous record high,’ Carnival explained.
Looking ahead to the rest of the year, prices for advanced bookings are ahead of pre-virus levels at constant currency, despite losing St Petersburg as a ‘marquee destination’ amid the war in Russia.
Carnival also introducing its SEA Change Program, with targets reflecting its strategic goals, for a three-year period ending in 2026.
The programme focuses on heightening sustainability by reducing its carbon intensity by 20% compared to 2019, increasing its Ebitda by 50% compared to its 2023 June guidance, and doubling its adjusted return on invested capital to 12%.
In June, the company said it expected to swing to an adjusted Ebitda between $4.10 billion and $4.25 billion for financial 2023, compared to its loss of $1.68 billion in financial 2022.
‘We are excited about all the opportunities ahead and the potential to create outsized value for our shareholders as we work towards our 2026 targets,’ said CEO Weinstein.
Carnival estimates occupancy at 100% or higher for its financial 2023 as compared to 75% in the year before
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