Carnival Corporation & plc (CCL) Q2 2023 Earnings Call Transcript

For the period ending May 31, 2023

June 26, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Josh Weinstein

Good morning. This is Josh Weinstein. Welcome to our Second Quarter 2023 Earnings Call. I'm joined today by our Chair, Micky Arison; our Chief Financial Officer, David Bernstein; and our Senior Vice President of Investor Relations, Beth Roberts.

Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I’ll refer you to the cautionary statement in today's press release. There are many milestones we've hit over the last two years, and this past quarter is no exception. In fact, there was much to celebrate in the second quarter.

We reached a meaningful inflection point for revenue with net yield surpassing 2019 strong levels. And on top of that, operating income, cash from operations, and adjusted free cash flow were all positive. Adding to those achievements, we just hit all-time highs for bookings and customer deposits.

And remarkably, we are still experiencing a phenomenal wave season, which started early, gained strength, and is still going strong midway through the year. This strength in demand delivered outperformance in the second quarter for revenue, adjusted EBITDA, and the bottom line, a credit to the dedicated efforts of our 160,000 amazing team members ship and shore.

Net yields in constant currency turned positive in the second quarter, compared to 2019 as we drove cruise ticket prices above 2019, while maintaining record onboard revenue growth and continuing to close the gap on occupancy. In fact net per diems in constant currency were up 7.5% over 2019 in the second quarter. This was 4.5 points better than the midpoint of guidance, which we were able to achieve while meeting our forecasted occupancy.

Based on continued strength in pricing, we have also raised our expectation for net per diems in the second half by over 2.5 points while again maintaining our occupancy expectations, which is supporting our guidance of higher net yields in the second half of 2023 over 2019 in constant currency. This revenue growth will be significantly higher than the increase in our cost guidance, which David will elaborate on.

All told, we are bringing another $275 million to the bottom line for the year, thanks to the strength in revenue, as well as the interest expense benefit we are capturing from deleveraging. On a per ALBD basis and holding fuel price and currency constant to 2019 levels, we progressed from 59% of 2019 EBITDA in the first quarter to 73% back in our second quarter.