Carnival's CEO said the company has enough money to make it through the rest of 2020 without bringing in any revenue
- Carnival Corp. CEO Arnold Donald told CNBC on Tuesday that the company could survive the rest of this year without bringing in any revenue.
- "We're not saying that's going to happen, but we want to be prepared for the worst case," he said.
- Carnival has brought in over $9 billion this year through bond and stock sales, as well as its existing credit lines.
- The company has halted new cruises since March.
- Do you work in the cruise industry? Do you have an opinion on how your company or the industry as a whole has handled the coronavirus? Email this reporter at mmatousek@businessinsider.com.
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Carnival Corp. has enough cash on hand to survive a scenario in which it earns no revenue for the rest of this year, Arnold Donald, the company's CEO, said on CNBC Tuesday.
"We're not saying that's going to happen, but we want to be prepared for the worst case," he said.
Carnival has raised over $6 billion in debt and equity this year after drawing $3 billion from its credit lines, and the company is looking for additional sources of funding after being left out of the US government's $2 trillion stimulus package, Donald told CNBC. The company has also cut the pay of executives and some ship-based workers.
"There's opportunities in Germany and the UK and Italy and other places for us to secure additional liquidity," Donald said.
The moves have come as the novel coronavirus has shut down the cruise industry after over 1,000 passengers on ships like the Diamond Princess, Ruby Princess, and Costa Luminosa tested positive for COVID-19. Many cruise lines, including those owned by Carnival, decided to voluntarily halt new cruises until May. Last week, the Centers for Disease Control and Prevention issued an order that could ban cruises in US-controlled waters until July.
While Carnival lost $781 million between December and February, compared to the $336 million profit it made during those same months a year earlier, a little under half of the customers who reached out to the company regarding canceled cruises during the first two weeks of March chose to receive credits for future cruises instead of cash refunds, suggesting Carnival's customer base will not abandon the company when it is allowed to resume sailing.
Since the beginning of this year, Carnival's stock price has declined by 75%.
Do you work in the cruise industry? Do you have an opinion on how your company or the industry as a whole has handled the coronavirus? Email this reporter at mmatousek@businessinsider.com.
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