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Carnival Sees $2.2 Bln Loss In Q4; Says Cash Burn Rate Slightly Better Than Expected

Carnival Corporation & plc (CCL,CUK,CCL.L) said it expects to report net loss of $2.2 billion and adjusted net loss of $1.9 billion in the fourth quarter of 2020. Cash burn rate in fourth quarter was slightly better than expected due to the timing of capital expenditures. The company has accelerated the removal of 19 less efficient ships, 15 of which have already left the fleet. Cumulative advanced bookings for the first half of 2022 are ahead of 2019, despite minimal advertising or marketing.

The company said it is now working diligently towards resuming operations in Asia, Australia, the UK and the U.S. over the course of 2021.

The company expects future capacity to be moderated by the phased re-entry of its ships, the removal of capacity from its fleet and delays in new ship deliveries.

The company said it has accelerated the removal of ships in fiscal 2020, since the pause in guest operations. It now expects to dispose of 19 ships, 15 of which have already left the fleet. In total, the 19 ships represent about 13 percent of pre-pause capacity and only three percent of operating income in 2019.

The company recently took delivery of two ships and expects only one more ship to be delivered in fiscal 2021 compared to five ships that were originally scheduled for delivery in fiscal 2021.

The company stated that, based on the actions taken to date and the scheduled newbuild deliveries through 2022, its fleet will be more efficient with a roughly 14 percent larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each case as compared to 2019.

As of November 30, 2020, the company has a total of $9.5 billion of cash and cash equivalents. During fiscal 2021, the company expects to enter into financial transactions to optimize its capital structure which may include opportunistically enhancing liquidity.

The company's monthly average cash burn rate for the fourth quarter 2020 was $500 million, which was slightly better than expected due to the timing of capital expenditures. The company expects the monthly average cash burn rate for the first quarter 2021 to be about $600 million. It continues to explore opportunities to reduce its monthly cash burn rate, the company said.

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