Carnival exits Q3 with the wind in its sails
- Third-quarter revenue up 59% to an all-time high of $6.9bn
- Underlying cash profit (EBITDA) of $2.22bn
- Underlying free cash flow of $1.1bn. Net debt down 7% since year-end to $28.5bn
Derren Nathan, head of equity research at Hargreaves Lansdown:
“The world’s biggest cruise operator is set to return to a positive operating profit this year after record revenues in the third quarter enabled a set of expectation-beating results. Looking ahead there’s some real momentum building into 2024. Full-year EBITDA guidance of $4.1bn to $4.2bn is broadly unchanged despite currency and fuel headwinds. So far, so good for Carnival’s post-pandemic recovery but the higher-for-longer rates scenario casts a shadow on two fronts. The first question mark is how long passengers’ willingness to splash out on a luxury cruise can last, as excess savings built up in lockdown are whittled away and credit remains expensive. Perhaps more worryingly is the Company’s ability to refinance at favourable rates. All is well and good whilst Carnival’s ships remain full and ticket prices robust but given the strong recovery in the share price this year, any hiccups along the way are likely to be punished by the market.“
