Carnival UK share price: A market perspective

Cruising took on a new dimension with the birth of Carnival Corporation, the largest leisure travel company in the world. The company owns nine of the world's leading cruise lines, unravelling an authentic and immersive travel experience across beautiful seacoasts.

The genesis and growth

Carnival is the result of a merger between the US-originated Carnival Corporation and the British cruise company P&O Princess Cruises in 2003. It is headquartered in Southampton, England and Miami, Florida is an embodiment of entrepreneurial audacity, vision, and perseverance.

The merger expanded the horizons of what had initially started as one ship, Carnival Cruise Line, to include major cruise brands worldwide such as Princess Cruises, Holland America Line, and Seabourn.

Voyage across nine spectacular brands

Carnival, operating a combined fleet of more than 100 ships, reaches every corner of the world. Each Carnival cruise line brand has its distinctive character, offering travellers a myriad of curated voyage experiences.

For instance, the festive spirit and grand decor of Carnival Cruise Line enthral families and young travellers.

Simultaneously, Princess Cruises attract those looking for elegance and relaxation, offering unwinding spa treatments, art auctions, and captivating cultural programs. Brands like Holland America and Seabourn promise an exquisite, luxurious boutique experience, calling for the affluent and the mature.

Carnival's impact on global tourism

Carnival's colossal contributions to the worldwide tourism industry cannot be disputed. Its cruise brands collectively sail to over 700 ports around the world, driving inbound tourism, boosting local economies and promoting cultural exchange.

Stimulating demand for cruising has led to significant job creation both directly and indirectly associated with Carnival. From shipbuilding industries and supply chain service providers to travel agencies and onshore attractions, the company's operations lead to exponential economic growth in the regions it touches.

Commitment to safe and sustainable cruising

Understanding the industry's role in preserving the marine environment and ensuring traveller’s safety, Carnival has been dedicated to sustainable operations, setting industry benchmarks.

The company invests significantly in the research and development of greener technologies to lessen its ecological footprint. Some of its fleet already run on Liquified Natural Gas, the most environmentally friendly fossil fuel.

By setting ambitious sustainability goals and diligently working towards its achievement, Carnival reaffirms its commitment to conserve and protect our planet.

Following the COVID-19 pandemic outbreak, Carnival also places an unprecedented emphasis on health and safety regulations. Their comprehensive strategies to manage, prevent and mitigate the risk of infection ensure the well-being of passengers while keeping intact the joy and exhilaration of cruising.

Prospects: Charting the course ahead

Despite facing unprecedented challenges amidst the global pandemic, Carnival is optimistic about the future of cruising, and rightly so. The hunger for travel and exploration that the pandemic has amplified points towards a hopeful and fruitful future for escapes into the sea.

The post-COVID world will witness Carnival expanding more keenly into sustainable operations. The company's intent to introduce additional LNG ships and establish shoreside power capabilities in homeports, among other goals, reflects this commitment.

Moreover, with digitisation transforming the travel landscape, Carnival intends to leverage emerging technologies for personalised guest experience. Travellers can expect more smart ships equipped with Ocean Medallion, a wearable device which serves as a digital concierge, access key, wallet and more.

Carnival financial performance

Carnival demonstrated a strong financial performance in the third quarter of 2023, achieving significant milestones and setting new records. Here's an overview of their financial highlights:

• Net income and earnings: The Company reported a U.S. GAAP net income of $1.07 billion, or $0.79 diluted EPS. The adjusted net income was even higher at $1.18 billion, or $0.86 adjusted EPS, surpassing their earlier guidance range for the quarter.
• Record revenue: Carnival reached an all-time high in revenues, totalling $6.9 billion for the third quarter. This impressive figure exceeded expectations and set a new benchmark for the company.
• Adjusted EBITDA: The Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) stood at $2.22 billion, surpassing the June guidance range.
• Booking and occupancy trends: Booking volumes during the third quarter were significantly high, establishing a new record for this period. The occupancy rate for the third quarter was 109 per cent, indicating a robust demand and a return to pre-pandemic levels.
• Customer deposits and debt management: Carnival achieved a third-quarter record with customer deposits reaching $6.3 billion. Moreover, the company has been actively managing its debt, reducing its debt balance by over 10 per cent, or nearly $4 billion, in the last six months. The company ended the third quarter with $5.7 billion in liquidity.
• 2023 outlook: For the full year of 2023, Carnival expects adjusted EBITDA to be between $4.1 billion and $4.2 billion. This outlook is despite a $125 million net unfavourable impact from fuel price and currency changes since June. The company also projects net per diems to increase by approximately 7.0 per cent compared to 2019.
• Fuel efficiency: The company anticipates its fuel consumption per available lower berth day for 2023 to be nearly 16 per cent lower than in 2019.

These results signify Carnival's robust recovery and growth, driven by strong demand and effective operational strategies. The company's financial position is strengthening, with significant progress in debt management and liquidity, setting a positive outlook for the rest of the year and beyond.

Carnival share price update

As of December 12, 2023, the share price of Carnival (CCL: LSE) closed at 1,270.00 GBX. This figure represents a 0.71% increase from the previous day, with a trading volume of 632.33k shares.

Over the past year, the company's shares have seen a substantial increase of 96.90%. Carnival stock has experienced notable fluctuations, with a 52-week range of 554.06 GBX (on December 29, 2022) to 1,376.63 GBX (on July 5, 2023).

Final thoughts

Carnival is more than just a cruise conglomerate; it is a curator of memorable experiences and a catalyst fuelling the world’s tourism industry.

Above all, it brings the beauty of the sea closer to thousands of travellers around the globe while fostering the preservation of the natural environment.

As it sails forward against the tide, Carnival continues to personify the promise of dream vacations, passionate services, and sustainable cruising.

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