Carnival shares set to fall as more cruises cancelled amid Covid-19

• Carnival shares under renewed pressure as Covid-19 leaves company rudderless
• The cruise operator has seen earnings suffer in H1 and expects further losses in H2 2020
• Outlook for Carnival remains uncertain as coronavirus cases surge once again
• Carnival shares down 6% on Wednesday, with the stock down 70% year-to-date

Carnival has seen its share price come under renewed pressure this week, after its Italian unit Costa opted to cancel the arrival of its ships for the 2020-21 season in South America due to the coronavirus pandemic.

All cruises aboard the Costa Fascinosa, Costa Luminosa and Costa Pacifica in South America with embarkations scheduled from November 2020 to April 2021 were cancelled.

'Costa Cruises has been sailing in South America uninterrupted for 72 years and we are committed to continue operating here,' Dario Rustico, executive president of Costa Cruises for Central and South America, said.

'We look forward to resuming operations in the region in the 2021-2022 season with two ships.'

The news prompted the stock to plunge 6% on Wednesday, with it trading at £10.92 per share at the time of publication and down 70% year-to-date.

Carnival reports disappointing second quarter earnings amid Covid-19

Considering the myriad of challenges the cruise operator has faced due to the pandemic, it is no surprise that it reported a disappointing set of quarterly results in June this year.

Carnival recorded a second quarter (Q2) net loss of $2.4 billion, with total revenues for the quarter sitting at just $700 million, down from the $4.8 billion it reported during the same period a year prior.

The company's guest cruise operations have been on hold for the majority of the second quarter. In addition, the company is unable to definitively predict when it will return to normal operations. As a result, the company is currently unable to provide an earnings forecast.

However, the company did admit that it expects to suffer a net loss on both a US GAAP and adjusted basis for the second half of 2020.

‘In the face of the impact of the Covid-19 global pandemic, the company paused its guest cruise operations in mid-March,’ the company said.

‘In response to this unprecedented situation, the company acted to ensure the health and safety of guests and shipboard team members, optimize the pause in guest operations and maximize its liquidity position.’

Carnival cruises tied up until November

Las week, Carnival said that its ultra-luxury cruise brand Seabourn will put a stop to additional voyages for three ships in its fleet, with the company opting to hit the pause button amid the Covid-19 pandemic.

‘Our utmost priority is the health, safety and well-being of our guests, crew and the people in destinations,’ Seabourn president Josh Leibowitz said.

‘We recognise the long lead time for planning an ultra-luxury Seabourn experience and with that in mind, we proactively announce the cancellation of these additional voyages.’

‘We are working very closely with science and medical advisors as well as our source and destination markets to develop protocols for the ultimate return to operations,’ he added.

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