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Carnival - first quarter ahead of expectations

Carnival's business update revealed revenues of $4.4bn for the first quarter of 2023.

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Carnival's second-quarter revenues more than doubled to $4.9bn, an all time high. The main driver was ticket sales, but onboard and other revenues also grew strongly.

Underlying cash profits (EBITDA) of $681m was at the higher end of previous guidance, but at the bottom line, Carnival remained in loss-making territory. One contributor to the losses was the increase in interest expenses from $358m to $522m.

Underlying free cash flow was $625m compared to an outflow of $487m. Net debt was $29.2bn, a reduction of £1.3bn since the year-end.

Looking ahead to the full-year underlying EBITDA guidance now stands at between $4.10bn to $4.25bn, a midpoint increase of $175m. The company noted a continued acceleration of demand. But Carnival also guided higher on cruise costs due to factors including a slower expected ramp down in inflationary pressures than previously estimated.

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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

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Written by
Derren Nathan
Derren Nathan
Head of Equity Research

Derren leads our Equity Research team with more than 15 years of experience in his field. Thriving in a passionate environment, Derren finds motivation in intellectual challenges and exploring diverse ideas within his writing.

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Article history
Published: 27th March 2023