CUK Q3 2022 Earnings

Call Details

• Call Title: Carnival Cruise Lines Q3 2022 Earnings Call
• Date: September 30, 2022 at 2:00 PM UTC
• Management Team:
  • Josh Weinstein (Chief Executive Officer)
  • Mickey Arison (Chair)
  • David Vernon (Chief Financial Officer)
  • Beth Roberts (Senior Vice President of Investor Relations)

Call Summary

Financial Performance

• Adjusted EBITDA was over $300M in Q3 2022, representing the first positive adjusted EBITDA since resumption of operations.
• Total revenue in Q3 2022 increased nearly 80% versus Q2 2022, reflecting strong sequential recovery.
• Occupancy in Q3 2022 was 84%, which was up 15 percentage points from Q2 2022, and August reached almost 90% occupancy.
• Revenue per passenger day decreased versus 2019 primarily due to future cruise credits (FCCs) and currency impacts given a stronger US dollar.
• Adjusted cruise costs excluding fuel per ALBD improved materially, with the differential versus 2019 narrowing from over $25 in Q1 to $10 in Q3.
• Adjusted cruise costs without fuel in constant currency per ALBD for Q3 2022 were up 14% versus Q3 2019 amid continued sequential cost improvement.
• Q3 2022 liquidity was $7.4B and total customer deposits were $4.8B, approaching the record $4.9B in Q3 2019.

Guidance

• Company expects breakeven to slightly negative EBITDA in Q4 2022 and expects overall second-half 2022 EBITDA to be positive.
• For full year 2023, cumulative advance book position is slightly above the historical average and priced considerably higher versus 2019 when normalized for FCCs.
• Estimated FCCs are expected to reduce 2023 yields by less than 1% for the full year.
• Occupancy is expected to improve during 2023 with a return to historical levels in the summer of 2023.
• Capacity in 2023 is expected to be approximately 3% to 5% higher than 2019 levels, reflecting a mostly stabilized deployment plan.
• Company expects fleet optimization benefits including roughly 10% higher fuel efficiency and approximately 6% efficiency in remaining operating costs versus the pre-optimization baseline.