Carnival Corporation has reported fourth quarter and full 12 months 2023 earnings and supplied an outlook for the complete 12 months and first quarter 2024.
Full Year 2023
- Full 12 months revenues hit an all-time excessive of $21.6 billion.
- Full 12 months money from operations was $4.3 billion and adjusted free money circulation was $2.1 billion (see “Non-GAAP Financial Measures” beneath).
- U.S. GAAP web lack of $74 million and optimistic adjusted web earnings of $1 million outperformed the September steering vary (see “Non-GAAP Financial Measures” beneath).
- The firm made debt funds of $6 billion, decreasing its debt steadiness by $4.6 billion from its peak within the first quarter of 2023 and ended the 12 months with $5.4 billion of liquidity.
- The firm entered 2024 with its finest booked place on file, for each worth and occupancy
Fourth Quarter 2023
- Record fourth quarter revenues of $5.4 billion with file web per diems (in fixed forex) considerably exceeding 2019 ranges and above the September steering vary and file web yields (in fixed forex) (see “Non-GAAP Financial Measures” beneath).
- Booking volumes for the 2 weeks round Black Friday and Cyber Monday reached an all-time excessive for that interval.
- Total buyer deposits reached a fourth quarter file of $6.4 billion, surpassing the earlier fourth quarter file of $5.1 billion (as of November 30, 2022), by 25 p.c.
“We ended the year on a high note with another record-breaking quarter that exceeded expectations and achieved positive full year adjusted net income. In fact, we consistently outperformed in all four quarters of the year, buoyed by a strengthening demand environment across all our brands,” commented Carnival Corporation & plc’s Chief Executive Officer Josh Weinstein.
“Net yields for the fourth quarter continued on a positive trajectory, were significantly higher than a very strong 2019 and even higher than we had anticipated, enabling us to overcome four years of high cost inflation to deliver five percent higher per unit EBITDA than 2019 (holding fuel and currency constant),” Weinstein added.
“Thanks to a strong second half of 2023, we are already tracking ahead of our plan to achieve SEA Change, our three-year financial targets calling for the highest adjusted ROIC and adjusted EBITDA per ALBD in nearly two decades. Based on our 2024 guidance, we expect to deliver another big step forward, positioning us more than halfway toward realizing all our 2026 SEA Change targets. With nearly two-thirds of 2024 on the books already, we are well positioned to obtain another year of record revenues and adjusted EBITDA,” Weinstein famous.
Fourth Quarter 2023 Results
- U.S. GAAP web lack of $48 million, or $(0.04) diluted EPS, and adjusted web lack of $90 million, or $(0.07) adjusted EPS, was above the higher finish of the September steering vary (see “Non-GAAP Financial Measures” beneath).
- Adjusted EBITDA of $946 million exceeded the September steering vary, pushed by continued power in demand, which is driving ticket costs greater (see “Non-GAAP Financial Measures” beneath).
- Record fourth quarter revenues of $5.4 billion, with file web per diems (in fixed forex) considerably exceeding 2019 ranges, and above the September steering vary and file web yields (in fixed forex).
- While gross margin yields had been down 4.6 p.c, web yields (in fixed forex) exceeded robust 2019 ranges by 7.8 p.c.
- Occupancy within the fourth quarter of 2023 was over 101 p.c, according to the corporate’s expectations and historic ranges.
- Gross margin per diems had been down 2.3 p.c in comparison with 2019, whereas web per diems (in fixed forex) exceeded 2019 ranges by over 10 p.c and had been three share factors higher than the midpoint of the September steering vary.
- Cruise prices per ALBD elevated 12 p.c as in comparison with the fourth quarter of 2019. Adjusted cruise prices excluding gas per ALBD (in fixed forex) elevated 11 p.c in comparison with the fourth quarter of 2019 and had been according to September steering (see “Non-GAAP Financial Measures” beneath).
- Total buyer deposits reached a fourth quarter file of $6.4 billion, surpassing the earlier fourth quarter file of $5.1 billion (as of November 30, 2022), by 25 p.c.
Bookings
“We entered the year with the best booked position we have ever seen, and now have nearly two-thirds of our occupancy already on the books for 2024, at considerably higher prices (in constant currency). We continue to experience strong bookings momentum across the board, with our European brands showing remarkable strength during the quarter with booking volumes running up well into the double digits at considerably higher prices (in constant currency),” Weinstein famous.
Weinstein continued, “Our yield management strategy to base load bookings is clearly working as we pull forward booking volumes on strong pricing. We continue to build on that momentum with our ongoing advertising investments and lead generation efforts, increasing support from our trade partners, and the exceptional guest experiences our team members provide onboard every day, helping to deliver millions of cruising advocates.”
Booking volumes through the fourth quarter continued at considerably elevated ranges, above each prior 12 months and 2019 comparable intervals, whereas latest reserving volumes for the 2 weeks round Black Friday and Cyber Monday reached an all-time excessive for that interval. Pricing on bookings through the fourth quarter was significantly greater than prior 12 months pricing (in fixed forex).
The cumulative superior booked place is at significantly greater costs (in fixed forex) than 2023 ranges, with every quarter of 2024 booked above the excessive finish of the historic vary.
2024 Outlook
For the complete 12 months 2024, the corporate expects:
- Adjusted EBITDA of roughly $5.6 billion, over 30 p.c development in comparison with 2023
- Net yields (in fixed forex) up roughly 8.5 p.c in comparison with 2023, with full 12 months occupancy returning to historic ranges and properly greater web per diems (in fixed forex) reflecting continued power in pricing and onboard spending
- Adjusted cruise prices excluding gas per ALBD (in fixed forex) up roughly 4.5 p.c in comparison with 2023
For the primary quarter of 2024, the corporate expects:
- Adjusted EBITDA of roughly $0.8 billion, greater than double the primary quarter of 2023
- Net yields (in fixed forex) up roughly 16.5 p.c in comparison with the primary quarter of 2023 with occupancy returning to historic ranges as the corporate closes the remaining occupancy hole within the first half of the 12 months
- Adjusted cruise prices excluding gas per ALBD (in fixed forex) up roughly 9.5 p.c in comparison with the primary quarter of 2023 primarily as a result of greater occupancy ranges, the timing of promoting investments and dry-dock associated bills in comparison with the prior 12 months
Financing and Capital Activity
“During 2023, we made debt payments of $6 billion and ended the year with just over $30 billion of debt, which is $3 billion better than we forecasted just nine months ago during our March conference call and almost $5 billion off the first quarter peak,” famous Carnival Corporation & plc Chief Financial Officer David Bernstein.
“And looking forward, we will continue to evaluate refinancing opportunities and opportunistically prepay additional debt. Furthermore, we expect durable revenue growth to drive increases in adjusted free cash flow in 2024 and beyond, which will be the primary driver for paying down our debt balances on our path back to investment grade,” Bernstein added.
During 2023, the corporate generated money from operations of $4.3 billion and adjusted free money circulation of $2.1 billion, making a big contribution towards rebuilding the corporate’s monetary power.
During the fourth quarter of 2023, the corporate lowered its debt by one other $725 million and for the complete 12 months made debt funds of $6 billion whereas ending the fourth quarter with $5.4 billion of liquidity, together with money and borrowings accessible underneath the revolving credit score facility. In addition, the corporate amended an settlement with one in all its bank card processors and now expects a further $800 million to be returned through the first quarter of 2024, representing considerably the entire bank card reserves steadiness as of November 30, 2023.