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Carnival Points to Strong Bookings as Basis for Continuing Rebound

December 25 ------ Reflecting the continuing progress of the cruise industry to rebuild its operations in 2022 and lay the groundwork for a stronger 2023, Carnival Corporation reported year-end results for 2022 largely in line with analyst estimates and dramatically improved over 2021. While passenger revenues and occupancy remained under pressure and below analyst estimates, the company points to signs of continuing strengthening along with a strong outlook for 2023. The world’s largest cruise company, however also highlighted the need for future steps to refine the operations including more fleet optimization in 2023. "Throughout 2022, we have successfully returned our fleet to service, aggressively building occupancy on growing capacity, while driving revenue per passenger cruise day higher than 2019 record levels, both in the fourth quarter and full-year overall,” said Josh Weinstein, who rose to the role of Carnival Corporation & plc's Chief Executive Officer after the retirement of Arnold Donald in the summer. Weinstein noted that the corporation also actively managed down costs while investing to build future demand saying that the company is building momentum into 2023.

During the fourth quarter which ended November 30 and is traditionally one of the industry’s softer periods, Carnival Corporation beat the analyst consensus for its earnings per share, but the corporation still reported an overall loss for the quarter and the year. Adjusted EBITDA showed a loss of $96 million, but the company noted that it included an approximate $40 million unfavorable impact from fuel price and currency rate fluctuations. Analysts said that lower-than-expected passenger ticket revenue and lower occupancy levels contributed to the below-estimated results for the fourth quarter. Despite being a seasonal period and including the reintroduction of more ships primarily in Australia, fourth quarter occupancy was slightly ahead at 84 percent. Occupancy however remains behind 2019 pre-pandemic levels.

Pointing to the building momentum, Weinstein highlighted that, "Booking volumes strengthened following the relaxation in protocols, cancellation trends are improving globally, and we have seen a measurable lengthening in the booking curve, across all brands. The momentum has continued into December, which bodes well for 2023 overall as more markets open for cruise travel, protocols continue to relax, our closer-to-home itineraries play out, our stepped-up advertising efforts pay dividends and our brands continue to hone all aspects of their revenue-generating activities."

Booking volumes during the fourth quarter of 2022 for 2023 sailings they reported neared 2019 comparable booking levels, with November booking volumes exceeding 2019 levels. They also pointed to strong early sales ahead of the industry's traditional “wave season” early in the calendar year when they typically see a surge in annual bookings. Weinstein highlighted that the full year 2023 cumulative advanced booked position is higher than its historical average at higher prices in constant currency, normalized for future cruise credits, as compared to a strong 2019. Carnival said that its total customer deposits hit a fourth quarter record of $5.1 billion as of November 30, 2022 , surpassing the previous record of $4.9 billion as of November 30, 2019. "We believe we are accelerating our return to strong profitability through our fleet and brand portfolio management which is delivering prudent capacity growth weighted toward our highest returning brands and amplified by nearly a quarter of our fleet consisting of newly delivered vessels,” said Weinstein.

To continue to manage the rebound, Carnival Corporation said that it would only increase the 2023 total capacity by three percent. Carnival has five cruise ships currently on order, what it highlights is its smallest orderbook in years, in addition to its coming joint venture in China. The corporation will continue efforts at fleet optimization while also focusing on continuing to realign its Costa Cruises brands which had previously expanded with a large presence in China. Carnival Corporation said it plans to “remove three additional smaller-less efficient ships from its fleet,” including two more ships from Costa. The company has already transferred one ship from Costa to Carnival Cruise Line and announced plans for two more to transition in 2023 and 2024. Since the onset of the pandemic, Carnival Corporation sold or retired two dozen of its oldest cruise ships.

Management expressed confidence in the strategy and the strength of the market in 2023. Wall Street agreed, driving Carnival Corporation’s stock price up five percent today.



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