Princess Parent Carnival Corp. Sells Ships After Quarterly Loss

Carnival Corp. disclosed in a quarterly filing Tuesday it will sell a total of 18 ships over the next few months to cut costs as cruise activity remains halted due to the coronavirus pandemic. That’s in addition to the company’s announcement in July that it would sell 15 ships. Carnival, based in Miami, owns nine cruise lines, including Princess Cruises and Cunard Line in Santa Clarita. It is unclear if any Princess or Cunard ships will be sold. Already, the company has sold 15 of the 18 ships disclosed in the Securities & Exchange Commission filing. Five older ships from Carnival Cruise Line – the Fantasy, Fascination, Imagination, Inspiration and Costa Victoria – have been sold for scrap. Additionally, according to news site Cruise Critic, four ships from Carnival subsidiary Holland America Line, three from Costa Cruises and three from P&O Cruises have been sold to undisclosed buyers. According to a statement from Carnival Chief Executive Arnold Donald, the selloff “will generate a 12 percent reduction in capacity and a structurally lower cost base, while retaining the most cash-generative assets in our portfolio. … We will emerge with a more efficient fleet, with a stretched out newbuild order book and having paused new ship orders, leaving us with no deliveries in 2024 and only one delivery in 2025, allowing us to pay down debt and create increasing value for our shareholders.” Regarding ships already under construction, Carnival said in the filing it expects just five of the nine ships previously scheduled for delivery by the end of 2021. The moves strengthen Carnival’s cash position during a tough financial stretch for the company. For the quarter ended Aug. 31, it reported an adjusted net loss of $1.7 billion. That follows a loss of $4.4 billion in the previous quarter. The company said has a total of “$8.2 billion of cash and cash equivalents.” A return to cruising in overseas markets indicates better days could be on the horizon. Carnival’s Costa Cruises line resumed 7-day cruises in Italy – open only to Italian passengers – on Sept. 6. AIDA Cruises in Germany will restart sailing this fall. In the U.S., however, the Centers for Disease Control and Prevention has extended its no sail order banning cruise activity through Sept. 30. Carnival announced last month that Cunard Line would extend its pause in operations through March 25, 2021. The line previously said it would resume cruising in November. As for Princess, 29 cruises on two ships scheduled for early 2021 were cancelled “due to limitations with border and port access … and the continued uncertainty of airline travel,” the company said in a statement.