Carnival sees $600M-$650M impairment charge in Q3

In connection with Carnival’s actions to maximize liquidity, the company previously announced, on July 10, plans to remove nine ships from its fleet in the next 90 days. The plans for the disposal of these ships are in addition to the sale of four ships, which were announced prior to fiscal 2020. Today the company said, “We have made a decision to remove a further two ships from our fleet. These decisions are intended to align the fleet with the expected phased restart of guest cruise operations while also generating cost savings.” On July 23, senior management of the Company evaluated these two ships for impairment and concluded their carrying values are no longer recoverable when compared to their estimated remaining future cash flows. Consequently, and in combination with other ships and notes receivables with recoverability impacted by the current environment, the company expects to record non-cash impairment charges during Q3. Carnival expects the aggregate impairment charge to be in the range of $600M to $650M. “We do not expect these impairments to result in any material future cash expenditures. We plan to continue to evaluate other options to maximize our liquidity and best position our fleet for future operations,” the company added.

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