MIAMI, Sept. 30, 2024 /PRNewswire/ -- Carnival Corporation & plc ((NYSE/LSE: CCL, NYSE:CUK) announced financial results for the third quarter 2024 and provided an updated outlook for the full year and an outlook for fourth quarter 2024.
Third quarter net income was $1.7 billion, an increase of over 60 percent compared to 2023 and adjusted net income1 outperformed June guidance by $170 million.
Third quarter revenues hit an all-time high of $7.9 billion, up $1.0 billion compared to the prior year.
Record operating income of $2.2 billion exceeded 2023 levels by $554 million.
As a result of strong demand and cost saving opportunities, raised its full year 2024 adjusted EBITDA1 guidance to approximately $6.0 billion, up over 40 percent compared to 2023 and better than June guidance by nearly $200 million.
The cumulative advanced booked position for full year 2025 is above the previous 2024 record with prices (in constant currency) ahead of prior year.
"We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led by high-margin, same-ship yield growth, driving a 26 percent improvement in unit operating income, the highest level we have reached in fifteen years," commented Carnival Corporation & plc's Chief Executive Officer Josh Weinstein.
"We are poised to deliver record operating performance for full year 2024, with adjusted EBITDA now expected to cross $6 billion and adjusted return on invested capital1 to be approximately 10.5 percent. Strong demand enabled us to increase our full year yield guidance for the third time this year and we improved our cost guidance driving more revenue to the bottom line," Weinstein added.
"Looking forward, the momentum continues as our enhanced commercial execution drives demand well in excess of our capacity growth, leaving us well positioned with an even stronger base of business for 2025, a record start to 2026 and firmly on the path toward our SEA Change targets," Weinstein noted.
Third Quarter 2024 Results
Net income was $1.7 billion, or $1.26 diluted EPS, an increase of $662 million compared to 2023. Adjusted net income of $1.8 billion, or $1.27 adjusted EPS1, was higher than June guidance by $170 million driven by outperformance in both yield and cost.
Record operating income of $2.2 billion exceeded 2023 levels by $554 million or 34 percent.
Record adjusted EBITDA of $2.8 billion increased over 25 percent compared to 2023 and outperformed June guidance by $160 million.
Third quarter revenues hit an all-time high of $7.9 billion, with record net yields1 (in constant currency) and record net per diems1 (in constant currency) both significantly exceeding 2023 levels.
Gross margin yields increased by 19 percent compared to 2023 and net yields (in constant currency) exceeded 2023 levels by 8.7 percent.
Gross margin per diems were up 16 percent compared to 2023. Net per diems (in constant currency) were up nearly 6 percent compared to 2023 with both ticket prices and onboard spending up mid-single digits.
Cruise costs per available lower berth day ("ALBD") increased 3.4 percent compared to 2023. Adjusted cruise costs excluding fuel per ALBD1 (in constant currency) decreased compared to 2023 and were significantly better than June guidance driven by cost saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items and the timing of expenses between the quarters.
Total customer deposits reached a third quarter record of $6.8 billion, surpassing the previous third quarter record of $6.3 billion as of August 31, 2023, despite lower capacity growth.
Bookings
"With nearly half of 2025 booked and less inventory remaining for sale than the prior year, we are leveraging strong demand to achieve record ticket pricing (in constant currency). Our brands continue to deliver robust bookings momentum, with all our brands ahead on price for 2025 sailings, based on the success of their demand generation efforts along with the exciting offerings and unparalleled experiences we consistently provide our guests. Likewise, 2026 is off to an unprecedented start achieving record booking volumes in the last three months," Weinstein noted.
During the third quarter, booking volumes remained robust for 2025 sailings at higher prices (in constant currency) compared to the prior year.
The cumulative advanced booked position for full year 2025 is above the previous 2024 record with prices (in constant currency) ahead of prior year.
_____________________________1 See "Non-GAAP Financial Measures" at the end of this release for additional information.
2024 Outlook
For the full year 2024, the company expects:
Net yields (in constant currency) up approximately 10.4 percent compared to 2023, better than June guidance, based on continued strength in demand.
Adjusted cruise costs excluding fuel per ALBD (in constant currency) up approximately 3.5 percent compared to 2023, approximately 1 percentage point better than June guidance driven by cost saving opportunities, accelerated easing of inflationary pressures and benefits from one-time items.
Adjusted EBITDA of approximately $6.0 billion, up over 40 percent compared to 2023 and better than June guidance by nearly $200 million.
Adjusted return on invested capital ("ROIC") of approximately 10.5 percent, an improvement of approximately 5.0 percentage points compared to 2023 and half a point better than June guidance.
For the fourth quarter of 2024, the company expects:
Net yields (in constant currency) up approximately 5.0 percent compared to particularly strong 2023 levels.
Adjusted cruise costs excluding fuel per ALBD (in constant currency) up approximately 8.0 percent compared to the fourth quarter of 2023 due primarily to higher dry-dock days and higher investment in advertising.
Adjusted EBITDA of approximately $1.14 billion, up 20 percent compared to the fourth quarter of 2023.
See "Guidance" and "Reconciliation of Forecasted Data" for additional information on the company's 2024 outlook.
Financing and Capital Activity
"We have continued to improve our leverage metrics and balance sheet with strong cash generation and continued debt reduction. We are pleased these efforts were recognized by both S&P and Moody's with their recent credit rating upgrades. For 2024, we expect better than a two turn improvement in net debt to adjusted EBITDA1 compared to 2023, approaching 4.5x, well on our way to investment grade. In fact, this year's adjusted free cash flow1 is expected to be over $3.0 billion," commented Carnival Corporation & plc's Chief Financial Officer David Bernstein.
The company continued its efforts to proactively manage its debt profile. Since June 2024, the company prepaid another $625 million of debt, bringing its total prepayments to $7.3 billion since the beginning of 2023. Additionally, the company has now fully utilized the accordion feature of its revolving credit facility, increasing the borrowing capacity by nearly $500 million and bringing the total undrawn commitment to $3.0 billion. The company ended the quarter with $4.5 billion of liquidity, including cash and borrowings available under the revolving credit facility.
During the third quarter, Fitch initiated its coverage of the company with a BB credit rating with a positive outlook. The company is now rated by all three major internationally recognized rating agencies. Additionally, S&P upgraded its credit rating to BB with a stable outlook and Moody's upgraded to B1 with a positive outlook. The company believes this is a testament to its improved leverage metrics and continuing journey to investment grade ratings.
The company continues to strategically direct new capacity towards its highest returning brand with the recent order of three additional ships to Carnival Cruise Line for delivery in 2029, 2031 and 2033. These ships will become the largest ships in the company's fleet and will carry more passengers than any other cruise ship to date. The company is following through on its measured capacity growth strategy of one to two ships per year on average, including just three ships scheduled for delivery through 2028. This will enable the company to utilize its substantial free cash flow to strategically improve its balance sheet by significantly reducing its leverage levels over the next several years.
The company obtained a new export credit facility, bringing its total committed financings related to ship deliveries to $3.4 billion, continuing its strategy to finance its newbuild program at preferential interest rates.
_____________________________1 See "Non-GAAP Financial Measures" at the end of this release for additional information.
Other Recent Highlights
Named by TIME as one of the World's Best Companies of 2024 and by Forbes as one of America's Best Employers for Women in 2024.
Opened a new innovative Fleet Operations Center in Hamburg, Germany to support its European brands.
Announced the expansion of Half Moon Cay. This popular private island will be enhanced to include an expanded beach, dining and beverage experiences along with a new pier that will allow the company's larger ships to visit.
In anticipation of Celebration Key's debut in July 2025, Carnival Cruise Line opened bookings for the destination's new exclusive retreat, Pearl Cove Beach Club, which will offer a premium experience for guests with a large selection of supervillas, cabanas and shore excursions.
Carnival Conquest, AIDAdiva and AIDAluna became the first cruise ships to connect to shore power at PortMiami, the Port of Stockholm and the Port of Oslo.
AIDA Cruises successfully piloted a new advanced blended biofuel, which is specifically intended for the maritime industry and lowers greenhouse gas emissions compared to conventional fossil fuels.
Seabourn Pursuit was named in a historic expedition ceremony, debuting its new itineraries visiting the Kimberley region in Australia.
Guidance
(See "Reconciliation of Forecasted Data")
4Q 2024
Full Year 2024
Year over year change
Current Dollars
Constant Currency
Current Dollars
Constant Currency
Net yields
Approx. 7.0%
Approx. 5.0%
Approx. 11.0%
Approx. 10.4%
Adjusted cruise costs excluding fuel per ALBD
Approx. 9.5%
Approx. 8.0%
Approx. 4.0%
Approx. 3.5%
4Q 2024
Full Year 2024
ALBDs (in millions) (a)
24.0
95.6
Capacity growth compared to prior year
3.1 %
4.7 %
Fuel consumption in metric tons (in millions)
0.7
2.9
Fuel cost per metric ton consumed (excluding European Union Allowance ("EUA"))
$ 590
$ 658
Fuel expense (including EUA expense) (in billions)
$ 0.43
$ 1.98
Depreciation and amortization (in billions)
$ 0.67
$ 2.57
Interest expense, net of capitalized interest and interest income (in billions)
$ 0.41
$ 1.68
Adjusted EBITDA (in billions)
Approx. $1.14
Approx. $6.0
Adjusted net income (loss) (in millions)
Approx. $60
Approx. $1,760
Adjusted earnings per share - diluted (b)
Approx. $0.05
Approx. $1.33
Weighted-average shares outstanding - basic
1,296
1,273
Weighted-average shares outstanding - diluted
1,301
1,398
(a)
See "Notes to Statistical Information"
(b)
Diluted adjusted earnings per share includes the add-back of dilutive interest expense related to the company's convertible notes of $94 million for full year 2024. The add-back expense is antidilutive to the fourth quarter of 2024 calculation and accordingly has been excluded.
Currencies (USD to 1)
4Q 2024
Full Year 2024
AUD
$ 0.68
$ 0.67
CAD
$ 0.74
$ 0.74
EUR
$ 1.12
$ 1.09
GBP
$ 1.33
$ 1.28
Sensitivities (impact to adjusted net income (loss) in millions)
4Q 2024
1% change in net yields
$ 42
1% change in adjusted cruise costs excluding fuel per ALBD
$ 27
1% change in currency exchange rates
$ 5
10% change in fuel price
$ 42
100 basis point change in variable rate debt (including derivatives)
$ 12
Capital Expenditures
For the fourth quarter of 2024, newbuild capital expenditures are $0.2 billion and non-newbuild capital expenditures are $0.6 billion. These future capital expenditures will fluctuate with foreign currency movements relative to the U.S. Dollar. In addition, these figures do not include potential stage payments for ship orders that the company may place in the future.
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT (3:00 p.m. BST) today to discuss its earnings release. This call can be listened to live, and additional information including the company's earnings presentation and debt maturities schedule, can be obtained via Carnival Corporation & plc's website at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation & plc is the largest global cruise company, and among the largest leisure travel companies, with a portfolio of world-class cruise lines – AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises, and Seabourn.
Additional information can be found on www.carnivalcorp.com, www.aida.de, www.carnival.com, www.costacruise.com, www.cunard.com, www.hollandamerica.com, www.pocruises.com.au, www.pocruises.com, www.princess.com and www.seabourn.com. For more information on Carnival Corporation's industry-leading sustainability initiatives, visit www.carnivalsustainability.com.
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements, estimates or projections contained in this document are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like "will," "may," "could," "should," "would," "believe," "depends," "expect," "goal," "aspiration," "anticipate," "forecast," "project," "future," "intend," "plan," "estimate," "target," "indicate," "outlook," and similar expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:
• Pricing
• Adjusted EBITDA
• Booking levels
• Adjusted earnings per share
• Occupancy
• Adjusted free cash flow
• Interest, tax and fuel expenses
• Net debt to adjusted EBITDA
• Currency exchange rates
• Net per diems
• Goodwill, ship and trademark fair values
• Net yields
• Liquidity and credit ratings
• Adjusted cruise costs per ALBD
• Investment grade leverage metrics
• Adjusted cruise costs excluding fuel per ALBD
• Estimates of ship depreciable lives and residual values
• Adjusted return on invested capital
• Adjusted net income (loss)
Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. These factors include, but are not limited to, the following:
Events and conditions around the world, including geopolitical uncertainty, war and other military actions, inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or desire of people to travel have led, and may in the future lead, to a decline in demand for cruises as well as negative impacts to our operating costs and profitability.
Pandemics have in the past and may in the future have a significant negative impact on our financial condition and operations.
Incidents concerning our ships, guests or the cruise industry have in the past and may, in the future, negatively impact the satisfaction of our guests and crew and lead to reputational damage.
Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-money laundering, anti-corruption, economic sanctions, trade protection, labor and employment, and tax may be costly and have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties and reputational damage.
Factors associated with climate change, including evolving and increasing regulations, increasing global concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increasing frequency and/or severity of adverse weather conditions could adversely affect our business.
Inability to meet or achieve our targets, goals, aspirations, initiatives, and our public statements and disclosures regarding them, including those that are related to sustainability matters, may expose us to risks that may adversely impact our business.
Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and may lead to reputational damage.
The loss of key team members, our inability to recruit or retain qualified shoreside and shipboard team members and increased labor costs could have an adverse effect on our business and results of operations.
Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our scheduled itineraries and costs.
We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers may be unable to deliver on their commitments, which could negatively impact our business.
Fluctuations in foreign currency exchange rates may adversely impact our financial results.
Overcapacity and competition in the cruise and land-based vacation industry may negatively impact our cruise sales, pricing and destination options.
Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the satisfaction of our guests.
We require a significant amount of cash to service our debt and sustain our operations. Our ability to generate cash depends on many factors, including those beyond our control, and we may not be able to generate cash required to service our debt and sustain our operations.
Our substantial debt could adversely affect our financial health and operating flexibility.
The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood. Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt balance incurred during the pause of our guest cruise operations. There may be additional risks that we consider immaterial or which are unknown.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.
Forward-looking and other statements in this document may also address our sustainability progress, plans, and goals (including climate change and environmental-related matters). In addition, historical, current, and forward-looking sustainability- and climate-related statements may be based on standards and tools for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions and predictions that are subject to change in the future and may not be generally shared.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
(in millions, except per share data)
Three Months Ended August 31,
Nine Months Ended
August 31,
2024
2023
2024
2023
Revenues
Passenger ticket
$ 5,239
$ 4,546
$ 12,609
$ 10,557
Onboard and other
2,657
2,308
6,474
5,640
7,896
6,854
19,083
16,197
Operating Expenses
Commissions, transportation and other
958
823
2,510
2,097
Onboard and other
866
752
2,043
1,785
Payroll and related
575
585
1,812
1,768
Fuel
515
468
1,546
1,492
Food
393
364
1,099
1,000
Other operating
995
928
2,796
2,546
Cruise and tour operating expenses
4,303
3,921
11,805
10,688
Selling and administrative
763
