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Carnival points to $11.7bn of liquidity as cruise bookings dry up

Published: 03:37 20 Mar 2020 EDT

Carnival PLC -

Carnival PLC (LON:CCL) reported a net loss for the first quarter and said cruise bookings were “meaningfully behind” last year due to coronavirus but assured that it has US$11.7bn of bank and debt liquidity available. 

The market valuation of the London and New York-listed cruise colossus has shrunk by around 80% since the start of the year, as the ongoing existence of all companies is being questioned by investors due to the economic fallout from the coronavirus, and the Covid-19 disease it causes, with travel and leisure companies in the eye of the storm. 

READ: Carnival warns of "material negative impact" after cruises stopped for coronavirus

Carnival said on Friday that, as of the end of February, its total liquidity was made up of US$3bn of “immediate liquidity” from a bank facility, plus US$2.8bn from credit facilities to fund ship deliveries it had planned for the remainder of this year, as well as another US$5.9bn for planned ship deliveries in 2021 and beyond. 

The group added that the US$3bn was from a bank facility that was fully drawn at the end of last week “in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the Covid-19 outbreak”.

In recent days, the corporation has cancelled all its cruise lines for between one and two months at least after a drop in global demand for holidays due to the spread of coronavirus, as well as pledging to cut costs and looking to tie down more financing.

Carnival also said “substantially all” of its assets, with the exception of certain ships, were available be pledged as collateral if the worst comes to the worst.

The net loss in the first quarter was US$781mln on revenues up from US$4.7bn to US$4.8bn, but with US$932mln of write-downs to the value of ships and goodwill.

Booking volumes in recent weeks have been “meaningfully behind” the prior year on a comparable basis as a result of the effects of coronavirus. 

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