Arnold Donald, president and CEO of Carnival Corporation, sold 62,639 company shares on Tuesday at a price of $21.12 for proceeds of $1,322,935, according to an SEC filing.
While the timing was less than ideal as the company remains out of service, the transaction was relatively routine.
Donald sold Carnival shares in mid-January in 2020, although at a much higher per-share price before the onset of the COVID-19 pandemic.
German cruise brand Aida Cruises has cancelled all voyages planned between October 31 and November 30, following news of Germany’s lockdown.
The Carnival Corporation brand said in a statement: “As a result of Germany implementing far-reaching measures to contain the coronavirus pandemic, Aida Cruises today (October 29) announced it will temporarily pause its cruises for November, cancelling all voyages planned between October 31 and November 30.
“This follows the federal government of Germany’s October 28 decision to impose further restrictions on public life and travel to limit the spread of Covid-19, which Aida Cruises fully supports.
“As the leading cruise line in Germany and a part of Carnival Corporation & plc, Aida Cruises’ highest responsibility and top priorities are compliance, environmental protection and the health, safety and well-being of its guests, crew, shoreside employees, and the people and communities its ships visit – and that commitment is reflected in the line’s temporary pause in cruise operations.
“Aida Cruises recognises its decision is disappointing to its guests and appreciates guests understanding the importance of making health and safety the most important priority.”
The cruise line resumed operations in mid-October and “will closely monitor the further development of the pandemic” before starting cruises again in December onwards.
With Covid-19 cases surging across Europe, Germany’s month-long national lockdown starts on Monday (November 2) with the closure of restaurants, bars, gyms and theatres.
Meanwhile, France will be going into lockdown from Friday (October 30) with citizens allowed to leave home only for essential work or medical reasons.
“At this time, we have every reason to be optimistic we will be sailing in the U.S. before year’s end,” said Arnold Donald, president and CEO of Carnival Corporation, on today’s third-quarter earnings call.
The company’s Costa Cruises brand has already returned to service with two ships in the Mediterranean, soon to be joined by a third ship, the Costa Smeralda, according to Donald. They are sailing weeklong cruises from different Italian homeports. The sister brand, AIDA, is set to launch service later this month, also in the Mediterranean, with German passengers.
Donald explained that the ships are sailing with lower occupancy levels enabling the cruise lines to test and assess their health and safety protocols.
With national brands, Donald said Carnival is ideally positioned for a phased-in return to service, as each brand can be restarted independently, and in most cases with ready access to drive-to markets.
Also, with a small percentage of the fleet entering service, for now, he said, there will be less reliance on new-to-cruise, compared to all previous growth cycles that required the brands to tap more new passengers.
In addition, as Carnival is disposing of some 18 older ships and right-sizing its shoreside organization, Donald said a leaner and more efficient company would emerge.
“All initiatives going forward will be focused on maximizing cash generation and creating shareholder value. The delivery schedules of new ships have been stretched out and there is only one new ship on order for 2024 and one for 2025. This will further reduce our capital expenditures and allow us to repay debt,” he added.
Added David Bernstein, CFO and chief accounting officer: “We are focused on assets that are cash generative, so we can pay down debt, rebuild our balance sheet and get back to investment-grade rating.
“We are working through a number of different financial scenarios, but there is a lot of uncertainty involved so it is difficult to give (financial) guidance. (However), we expect over time to build occupancy up to generate positive cash flow and reduce the cash burn. The start-up occupancy level is less than 50 per cent. Over time, once we know we have things right, we will increase occupancy, while keeping social distancing in mind as well.”
Bernstein noted that the break-even point ranges from 30 to 50 per cent occupancy for different ships.
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