Carnival Share Price
On 17 January 2020, the London-listed Carnival (LON:CCL) share price was at 3,708p per share. However, by April, the British-American cruise operator’s stock value plummeted to 614.8p per share as the extent of the ongoing travel restrictions became clear. Since then, the company’s share price has seen a mini-resurgence, climbing up to 1,620.85p. With the economic outlook around the world gradually becoming more optimistic, and restrictions being lifted over the coming weeks, now could be an opportune time for investors to capitalise.
Financial Performance
Similar to the airlines, Carnival took a beating last year. In January the cruise operator disclosed an adjusted net loss of $1.9bn for Q4 of 2020. However, the airline has said its cash burn rate was slightly better than expected due to the timing of capital expenditures. Carnival also confirmed that it ended Q4 of 2020 with $9.5 billion of cash and cash equivalents.
Carnival’s chief financial officer David Bernstein outlined the company’s plan to use the cash to get through the coming year, even in the event of no revenue coming in.
“We ended the year with $9.5 billion in cash and have the liquidity in place to sustain ourselves throughout 2021, even in a zero-revenue environment.”
“While we raised capital mainly through debt this year, in the last few months we opportunistically strengthened our capital structure by raising $2.5 billion through at-the-market equity offering programs and by the early conversion of $1.5 billion of convertible debt.”
“As we return to full operations, our cash flow will be the primary driver to return to investment grade credit over time, creating greater shareholder value,” Bernstein said.
Getting Back to Business
Carnival confirmed its cumulative advanced bookings received for the first half of 2022 exceeded bookings for 2019. While bookings for the second half of 2021 are within “the historical range”.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted in the company’s annual report: “The booking trends that we have consistently experienced throughout this period affirm the strong fundamental demand for our brands which will facilitate our staggered resumption and support the long-term growth of our company.”
However, while demand is there, the powers that be are taking a cautious approach. The UK Prime Minister will finalise the plan to resume international travel no earlier than May 17, 2021. In addition, Carnival has outlined its intention to resume cruises in June 2021.
