Moody's Revises Carnvial Rating Outlook

Thursday, October 04, 2001
Moody's Investors Service confirmed the A2 senior ratings of Carnival Corporation, but changed the rating outlook to negative reflecting the uncertain economic and industry conditions that the company faces in the wake of the attacks on the U.S. on September 11.

While Carnival's financial flexibility is strong, its ratings could come under pressure if significant and sustained consumer reluctance to take cruises results in a substantial drop in yield and cash flow from operations.

Moody's notes that Carnival currently maintains a large cash balance of $1.2 billion at 8/31/01.

This cash balance together with future earnings should enable the company to finance its shipbuilding program without having to increase debt levels.

Moody's believes the events of September 11th will further stress industry conditions that were already suffering from price weakness due to economic softness and capacity expansion within the industry.

Although the company's business conditions are improving day by day since the attack, the longer term impact on leisure travel patterns is still unknown.

The negative consequences of industry-wide capacity expansion may be softened somewhat by the exit of marginal cruise operators, evidenced by the recent bankruptcy filing by Renaissance.

The negative rating outlook captures the risk of significant deterioration in pricing and in the volume of travel in the context of a high fixed cost business.

Moody's expects Carnival to continue its focus on cost reduction and cash conservation in light of industry conditions.

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Lifting Specialists Modulift, IMES form Joint Venture

Lifting industry specialists Modulift and IMES have formed a joint venture to offer an integrated management service to clients internationally.   The two companies

Chinese PM Inks 2 Agreements During CMA CGM Visit

The CMA CGM Group hosted the Chinese Prime Minister, the French Foreign Affairs Minister and a ministerial delegation at its headquarters in Marseilles, July 1, the global shipping company announced.

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

Finance

Charleston Harbor Deepening Gets US Funding

Charleston Harbor deepening project earns key federal funding for preconstruction engineering and design; U.S. Army Corps of Engineers allocates $1.303 million

Chinese PM Inks 2 Agreements During CMA CGM Visit

The CMA CGM Group hosted the Chinese Prime Minister, the French Foreign Affairs Minister and a ministerial delegation at its headquarters in Marseilles, July 1, the global shipping company announced.

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

 
 
Maritime Security Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0449 sec (22 req/sec)