Carnival Corp record revenue and 4th quarter earnings

[ontheweb]

10 minutes ago, mz-s said:

 

The fact that they are paying down principal is a good thing. Although I disagree with the notion that anybody "forced" them to take on so much debt. Certainly they were prevented from operating their business - pretty much unprecedented. But they took on so much more debt than their competitors. It's really made their position much more precarious than it needed to be.

They are larger than their competitors, more ships to maintain. I would think that is what forced their debt load to be higher.

[tidecat]

1 hour ago, mz-s said:

 

If even with record high revenue they are still losing money, it does matter a lot in my opinion.

 

Do you know what a zombie company is?

Carnival made money in Q3 to the tune of $1.07 billion. The net loss for the full year was only $74 million, and the adjusted net income was $1 million. The Q3 2023 result is essentially 99% of what Carnival forecasts in profit for all of FY 2024. Carnival does have some seasonality in their business, and the timing of a few drydocks or a marketing spend can swing the results for a quarter.

 

A lot of things won't repeat between 2023 and 2024, namely the interest on the debt Carnival paid off. All of the fleet has resumed sailing and all of the ships scheduled for disposal have been liquidated. Carnival also took a small loss to exit their position in what is now Adora Cruises.

 

 

[mz-s]

8 minutes ago, tidecat said:

Carnival made money in Q3 to the tune of $1.07 billion. The net loss for the full year was only $74 million, and the adjusted net income was $1 million. The Q3 2023 result is essentially 99% of what Carnival forecasts in profit for all of FY 2024. Carnival does have some seasonality in their business, and the timing of a few drydocks or a marketing spend can swing the results for a quarter.

 

A lot of things won't repeat between 2023 and 2024, namely the interest on the debt Carnival paid off. All of the fleet has resumed sailing and all of the ships scheduled for disposal have been liquidated. Carnival also took a small loss to exit their position in what is now Adora Cruises.

 

I thought we were talking about Q4 in this thread?

[Joebucks]

2 hours ago, mz-s said:

 

If even with record high revenue they are still losing money, it does matter a lot in my opinion.

 

Do you know what a zombie company is?

 

Would you have been happier if they didn't pay down debt, in order to post a "profit?" 

[mz-s]

2 minutes ago, Joebucks said:

 

Would you have been happier if they didn't pay down debt, in order to post a "profit?" 

 

I am not the one that said they would be profitable 2 years ago, that was the Carnival CEO or CFO that said that. As I have mentioned countless times on this board, I have no dog in this hunt - I have no position with $CCL.

Edited December 23, 2023 by mz-s

[sparks1093]

5 hours ago, mz-s said:

Maybe with these figures, on my next cruise I won't have to hear a little boy ask his grandmother "Granny what does bacation mean?"

As far as I'm concerned the bacon can stay on bacation if it means a solvent company that keeps fares low and offers a good product.

[tidecat]

29 minutes ago, mz-s said:

 

I thought we were talking about Q4 in this thread?

I was replying to your "zombie company" comment.

[mz-s]

1 hour ago, sparks1093 said:

As far as I'm concerned the bacon can stay on bacation if it means a solvent company that keeps fares low and offers a good product.

 

The next year or so will be telling. Their occupancy is over 100% so they can't grow by filling more berths really and there is very limited new tonnage coming online. The question is how much more can they raise prices and/or add charges to things that used to be included to continue to drive growth.

 

A pack of bottled water is now $14 delivered to your cabin. Will people pay more than that, just as one example.

Edited December 23, 2023 by mz-s

[ItsADryHumor]

18 hours ago, jimbo5544 said:

This is great news for a company that needed some,

 

https://cruiseindustrynews.com/cruise-news/2023/12/carnival-corp-reports-record-2023-revenue-and-fourth-quarter-earnings/

I saw this and was really pleased for them. 

[jimbo5544]

14 minutes ago, ItsADryHumor said:

I saw this and was really pleased for them. 

Really good news.   

[jimbo5544]

3 hours ago, ontheweb said:

They are larger than their competitors, more ships to maintain. I would think that is what forced their debt load to be higher.

Bingo

[sparks1093]

2 hours ago, mz-s said:

 

The next year or so will be telling. Their occupancy is over 100% so they can't grow by filling more berths really and there is very limited new tonnage coming online. The question is how much more can they raise prices and/or add charges to things that used to be included to continue to drive growth.

 

A pack of bottled water is now $14 delivered to your cabin. Will people pay more than that, just as one example.

Other cruise lines charge much more than Carnival does and it doesn't seem to slow them down, but I seriously doubt they are making that much on water sales. The target for sailings industry wide is 110% so it would stand to reason that is Carnival's goal as well. 

[TiredTrucker]

8 hours ago, mz-s said:

Did I read it correctly that even with record revenues, Carnival still reported a loss?

 

They predicted they'd be profitable almost 2 years ago now...still losing money. At what point do we call Carnival a zombie company?

 

Pawn your assets during the lean times and then buy them back later, same thing all big businesses do.  I work in the oil industry, they've been raking it in but you wouldn't know it to look at them, they are using their revenues to buy back their assets, or so they say.   

[tidecat]

7 hours ago, mz-s said:

 

The next year or so will be telling. Their occupancy is over 100% so they can't grow by filling more berths really and there is very limited new tonnage coming online.

Carnival Jubilee, Sun Princess, and Queen Anne all enter service in FY 2024 (which began December 1). That's actually a pretty decent capacity increase at around 11,500 lower berths.

[sparks1093]

10 hours ago, sparks1093 said:

Other cruise lines charge much more than Carnival does and it doesn't seem to slow them down, but I seriously doubt they are making that much on water sales. The target for sailings industry wide is 110% so it would stand to reason that is Carnival's goal as well. 

After reflecting on it our last two sailings were over 100% capacity (Glory this year, Legend last). I didn't do the math so I don't know how close they were to 110%.

Edited December 24, 2023 by sparks1093

[ledges1]

Three Months Ended  November 30,				Twelve Months Ended  November 30,
STATISTICAL INFORMATION	2023		2022		2023		2022
Passenger cruise days ("PCDs") (in millions) (a)	23.6		18.3		91.4		54.6
ALBDs (in millions) (b)	23.2		21.5		91.3		72.5
Occupancy percentage (c)	101 %		85 %		100 %		75 %
Passengers carried (in millions)	3.1		2.5		12.5		7.7

[jimbo5544]

3 minutes ago, ledges1 said:

Three Months Ended  November 30,				Twelve Months Ended  November 30,
STATISTICAL INFORMATION	2023		2022		2023		2022
Passenger cruise days ("PCDs") (in millions) (a)	23.6		18.3		91.4		54.6
ALBDs (in millions) (b)	23.2		21.5		91.3		72.5
Occupancy percentage (c)	101 %		85 %		100 %		75 %
Passengers carried (in millions)	3.1		2.5		12.5		7.7

Interesting. Where did it  come from?

Edited December 24, 2023 by jimbo5544

[IntrepidFromDC]

18 hours ago, sparks1093 said:

As far as I'm concerned the bacon can stay on bacation...

 

[Paelos]

22 hours ago, mz-s said:

Did I read it correctly that even with record revenues, Carnival still reported a loss?

 

They predicted they'd be profitable almost 2 years ago now...still losing money. At what point do we call Carnival a zombie company?

In Q4 they recorded a $900m EBITDA gain, which is all the investors and bankers will care about. The interest and depreciation skew the results, so when anybody values the company they are looking at EBITDA multiples.

[sparks1093]

12 minutes ago, IntrepidFromDC said:

 

You snipped the most important part.

[mz-s]

4 minutes ago, Paelos said:

In Q4 they recorded a $900m EBITDA gain, which is all the investors and bankers will care about. The interest and depreciation skew the results, so when anybody values the company they are looking at EBITDA multiples.

 

That's a good point - Carnival has a lot of debt at very high interest rates that will make true profitability very difficult for years to come.

[Paelos]

Yep but the good news is issued more equity to pay down debt and have been plowing back the cash flow into the debt as well. Also there aren't any new ships in the hopper which means depreciation will slow as assets begin to age. So I would expect them to get out of debt and into a cash plus position in 3 years. 

[jimbo5544]

2 minutes ago, Paelos said:

Yep but the good news is issued more equity to pay down debt and have been plowing back the cash flow into the debt as well. Also there aren't any new ships in the hopper which means depreciation will slow as assets begin to age. So I would expect them to get out of debt and into a cash plus position in 3 years. 

Love that news!!

[mz-s]

3 minutes ago, Paelos said:

Yep but the good news is issued more equity to pay down debt and have been plowing back the cash flow into the debt as well. Also there aren't any new ships in the hopper which means depreciation will slow as assets begin to age. So I would expect them to get out of debt and into a cash plus position in 3 years. 

 

How will they drive additional revenue to accelerate their debt payoff? Can they raise rates an additional 10, 20, 30%? They do have a few ships coming online so that does add a little more capacity, but not enough to really move the needle all that much.

[Paelos]

They are already driving record revenue. All they need to do is operate at capacity now. The debt service on TTM is $2B and their EBITDA is $4B. And again they are paying down the excess debt so they don't have to get to zero debt, they just need to get back to debt position from 2019 which was their normal operating debt point.

 

Also if the fed drops rates in 2024-2025 as we anticipate, they look to refinance the debt that is outstanding in 2 years, which depending on market may help reduce the higher number they had to secure when they had no income.