Carnival Corp’s preliminary Q2 results report a record £3.54 billion in losses

Carnival Corporation (NYSE: CCL) said on Thursday that its losses climb to a record £3.54 billion in the recent quarter. The company attributed its losses to the Coronavirus pandemic that weighed on demand and resulted in significant write-downs for the cruise operator.

Shares of the company were reported about 6% down in premarket trading on Thursday. At £15 per share, Carnival Corp is roughly 65% down year to date in the stock market after recovering from a low of £6.42 per share in the first week of April. Learn more about capital markets.

Carnival had £6.12 billion at the end of May

As of the end of May, the Miami-headquartered company had £6.12 billion with a monthly cash burn of about £523.50 million. Carnival expects customers to return later in 2020 and is currently seeking regulatory approval to resume some lines. Carnival posted a 7% decline in the stock market last week as analysts said cruises were overbought and overvalued.

According to Carnival, it will use a phased approach to resume operations but is still committed to slashing its overall capacity. The cruise operator has already revealed plans of selling 6 of its ships.

Carnival completely withdrew from its £2.42 billion credit facility in recent weeks and issued bonds and equity worth £5.32 billion. The U.S. company is now exploring ways to further waive debt repayments scheduled for next year. Carnival said in a statement on Thursday:

“The longer the pause in guest operations continues, the greater the impact on the company’s liquidity and financial position.”

Carnival says 50% of its guests requested full refunds

It is a common practice for cruise lines to get bookings six to twelve months in advance. Owing to COVID-19 that hit Carnival’s ships in early 2020 in Asia, thousands of tickets were cancelled and refunded, as per Carnival Corp.

The cruise operator also highlighted on Thursday that at least 50% of its guests requested full refunds following cancellations while others were flexible enough to rebook. In terms of new bookings, Carnival revealed signs of early recovery in May for cruises scheduled for next year. The bookings, however, were still down sharply as compared to last year.

Excluding non-recurring charges, Carnival’s preliminary Q2 net loss came in at £1.93 billion. This translates to £2.66 of loss per share versus a much lower £1.26 of loss per share expected.

At the time of writing, the Florida-based cruise operator has a market cap of £11.05 billion and a price to earnings ratio of 6.95.