Carnival sails ahead as cruise demand grows

Carnival has posted record operating income and revenue despite the closure of Baltimore port following the collapse of the Francis Scott Key Bridge.

Carnival’s second quarter results have come in ahead of expectations despite disruption to routing in the Red Sea and the temporary closure of its port in Baltimore following the collapse of the Francis Scott Key Bridge.

Customer bookings have soared, with deposits of $8.3bn (£6.55bn) significantly ahead of a prior record of $7.2bn. Operating income also reached a record $560m, nearly five times 2023 levels on record second quarter revenue of $5.8bn.

Underlying cash profit (EBITDA) rose over 75 per cent to $1.2bn alongside turnover of $5.8bn, which increased from $4.9bn the year prior.

As a result, the Miami-headquartered operator hiked its full-year EBITDA guidance to $5.8bn, up from $5.6bn.

“We have made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition and formulating growth plans, while strengthening even further our global team, the best in the business,” said Carnival Corporation’s Chief Executive Officer, Josh Weinstein.

“Off the back of that effort, we closed yet another quarter delivering records, this time across revenues, operating income, customer deposits and booking levels, exceeding our guidance on every measure.”

Shares are up over seven per cent this year to date.

“Based on continued strong demand trends, we are taking up our expectations for the year with net yields now forecasted to top 10 percent and propelling us towards double-digit returns on invested capital,” Weinstein added.

The bumper results come disruption to routes in the Red Sea following attacks by Iran-backed Houthi rebels in November. Baltimore port, which is key to Carnival’s operations, was also closed indefinitely in March after the collapse of the Francis Scott Key Bridge, impacting demand.

Derren Nathan equity research at Hargreaves Lansdown, said: “Carnival’s second quarter results have come into port ahead of expectations… Customers are still booking in droves with deposits of $8.3bn sailing passed the previous record of $7.2bn.

“The upgrade in full year guidance is underpinned by a record booking position, both in terms of prices and occupancy. The early signs for next year are also looking good, although it’s still early days.”