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World’s top three cruise lines accumulate over $60 billion in debt

World’s top three cruise lines accumulate over $60 billion in debt
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Written by Harry Johnson

For the world’s top three cruise lines, surviving the year took its toll resulting in a high level of cash burn and massive debt burdens

  • Norwegian Cruise Lines’ debt burden was over $12.15 billion
  • For Carnival Corporation, the debt was around $30 billion
  • Royal Caribbean, accumulated debt was over $18.95 billion

The year 2020 was unforgiving for cruise lines but 2021 seems to have started off on a slightly higher note. For the top three industry players, surviving the year took its toll resulting in a high level of cash burn and massive debt burdens.

According to the latest research data, the top three cruise lines have accrued more than $60 billion in debt during the pandemic period. Norwegian Cruise Lines’ debt burden was over $12.15 billion. For Carnival Corporation, it was around $30 billion while for Royal Caribbean, it was over $18.95 billion.

Deutsche Bank raised its price target on Royal Caribbean stock from $62 to $79. On the other hand, JP Morgan went from $91 to $100. As a result of this positive sentiment, the cruise company’s share price soared.

According to the industry data, Royal Caribbean’s share price as of March 24, 2021 was $82.45, up by 92.36% over the one-year period. Comparatively, in 2020, its share price fell by 44%.

Similarly, Carnival Corporation and Norwegian Cruise Lines are on an uptrend since the start of 2021. Trading at $25.79, Carnival is up by 59.8% over the one-year period, while Norwegian is up 61.1% at a share price of $25.40.

In Q4 2020, Royal Caribbean posted a net loss of $1.37 billion, sending its annual loss to $5.8 billion. Revenue for the period amounted to $34.1 million, a far cry from its Q4 2019 figure of $2.52 billion. For the full year 2020, its revenue totaled $2.2 billion.

Carnival Corporation posted a loss of $2.2 billion for its fiscal Q4 which ended in November 2020.

Analysts have, however, expressed optimism, projecting an increase of 13.6% for Carnival’s fiscal year 2021 revenue. In fiscal year 2020, the increase will be a stunning 227.4%.