Cruise operator Carnival closing in on deal to ride out virus storm
SHARES in Carnival climbed by a fifth yesterday, making it the biggest riser on the FTSE 100, after analysts speculated the cruise operator could be close to securing additional financing.
Analysts at UBS said: “Our key takeaway from Carnival’s release is that it suggests to us that Carnival may be close to securing additional financing, hence the need for disclosing its preliminary results.”
The company also said forward bookings for the first half of 2021 were only slightly below the previous year, which UBS said was “surprising”.
But the cruise group warned that the Covid-19 crisis will have a “material negative impact” on its financial results and liquidity this year, after it paused its global fleet operations and put all its liners in dry dock.
The company said it was unable to provide an earnings forecast for 2020, but added that it expects to report a net loss for its full-year.
The blue chip company swung to a $781m (£656m) net loss in its first quarter, compared to a $336m (£290m) net gain in the same period last year. Despite yesterday’s rally, the company’s London-listed shares have still plunged by three-quarters this year. They closed up 149p at 886p yesterday, valuing Carnival at £6.9bn.
Overall, all major European indices closed in the green after a wave of unprecedented global stimulus boosted equity markets.
The FTSE 100 rose 0.76pc after forfeiting earlier gains. The FTSE 250 jumped nearly 6pc. The pound had a rollercoaster day, climbing above $1.18 in afternoon trading in its biggest rally since 2008, before diving down to $1.16 after the stock markets closed and the Chancellor unveiled his latest help for the UK’S economy. Travel stocks were among the top performers of the day. British Airways owner IAG climbed 21p to 216p, easyjet rose 93p, or 18pc, to 600p, while retailer Whsmith
– which runs outlets at travel hubs – surged by more than a third to 945p, up 244.5p.
Analysts at Citi said: “Whsmith is well positioned to take market share and to capitalise on the significant growth opportunity presented by its US acquisitions.
“However, in the medium term we continue to expect further disruptions across both UK and International Travel, as government containment measures continue and airlines continue to cut capacity.”
Rightmove slumped 11pc after it staged an about turn on its deferred payments scheme, announcing it will be refunding all its customers invoices by 75pc for the next four months – the first time it has reduced its fees since being established in 2000.
The world’s leading central banks have also powered up the swap lines, used to offer dollar liquidity to banks around the world, in the latest move to calm financial markets.
The Federal Reserve, Bank of England, European Central Bank, Swiss National Bank and Bank of Japan are all coordinating the action to make sure dollars are easily available to non-us financiers.