Carnival Corporation & plc (CCL) Q4 2022 Earnings Call Transcript

For the period ending November 30, 2022

December 21, 2022 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 Fourth Quarter 2022 Business Update Conference 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 must refer you to the cautionary statement in today’s press release.

Our business continues to accelerate on an upward trajectory as we rapidly close the gap to 2019. In fact, we are already exceeding 2019 revenue per diem, and we’re gaining momentum on our return to strong profitability.

Taking a step back, this year, we’ve completed a monumental 18-month journey, and with our scale, what we believe to be the world’s largest start-up, returning 90 ships to service, re-boarding over 100,000 team members, and restarting our unmatched portfolio of 8 private islands and port destinations, plus our unrivaled land-based footprint in Alaska and the Yukon, all while welcoming back nearly 9 million guests. For that, I sincerely thank our global teams around the world for the ingenuity and sheer determination it took to see that through to completion.

Throughout 2022, we have aggressively built occupancy from a 50-point gap in the first quarter to less than 20 points in the fourth quarter. We achieved this on growing capacity as we returned another 35% of our fleet to service in 2022, reaching 99% of our 2019 capacity levels during the fourth quarter. And on top of this, our constant dollar revenue per passenger cruise day was 2% higher than 2019’s record levels for the full year and 4% higher in the fourth quarter, overcoming the dilutive effect of future cruise credits. Without this impact, each would have been two points higher, and in the process we sustained record breaking onboard revenue per diem significantly higher than 2019.

We’re also not losing sight of our cost base as we’ve worked through our restart and continue to absorb and mitigate the impacts of the high inflationary environment we’ve all been living in. We’ve reduced the increase in adjusted cruise costs, excluding fuel per ALBD in constant currency from up 25% in Q1 to up 11% in Q4. We’ve also significantly ramped up our advertising and sales support to drive future demand. Thanks to this, and the hard work of our amazing trade partners, our percentage of first time guests has continued to sequentially improve, closing the gap to 2019 levels. And we’ve been working smarter with our shoreside teams’ headcount already having been significantly reduced from 2019 levels for some time now.