Carnival pays down over $1.3 billion debt due 2023, 2024 in Q2, June

By Devika Patel

Knoxville, Tenn., June 27 – Carnival Corp. & plc paid down over $1 billion of variable rate debt, mostly due in 2023 and 2024, last quarter and has paid down $300 million of 2024 maturities in June.

Following this, fixed rate debt now represents approximately 80% of the company’s debt portfolio, providing protection from rising interest rates.

“The increased confidence in our future drove us to use a portion of our liquidity to prepay $1.4 billion of variable rate debt, mostly with 2023 and 2024 maturities which, combined with other factors, will reduce our interest expense for the year by over $80 million and leave us with approximately 80% of our debt having fixed interest rates protecting us from rising rates,” chief accounting officer and chief financial officer David Bernstein said on the company’s first quarter ended March 31 earnings conference call on Monday.

“We are beyond the peak of our total debt [which] peaked at over $35 billion in the first quarter of 2023.

“We believe we are very well positioned to pay down debt maturities for the foreseeable future,” Bernstein said.

At quarter-end, Carnival had $7.3 billion of liquidity, which is expected to decrease as the company keeps deleveraging.

“We have now begun deleveraging our balance sheet and are already $1.4 billion off the peak,” president and chief executive officer Josh Weinstein said on the call.

“During the quarter, we used excess liquidity to opportunistically prepay over $1 billion of debt, while still retaining $7.3 billion of liquidity, which we expect to ratchet down as we rebuild our balance sheet over time,” Weinstein said.

The company reported record second quarter revenue of $4.9 billion.

Adjusted EBITDA for the second quarter of 2023 was $681 million.

Cash and cash equivalents were $4,468,000,000 as of May 31, 2023, compared to $4,029,000,000 as of Nov. 30, 2022.

Long-term debt was $31,921,000,000 as of May 31, 2023, compared to $31,953,000,000 as of Nov. 30, 2022.

Current portion of long-term debt was $1,789,000,000 as of May 31, 2023, compared to $2,393,000,000 as of Nov. 30, 2022.

Carnival Corp. is a Miami-based unit of London-based cruise operator Carnival plc.

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