Carnival Corp suspends 2009 dividend payments
Global cruise giant Carnival Corporation is suspending shareholder dividend payments for the whole of 2009.
The measure will result in annual cash savings of $1.3 billion and mean the company will have flexibility to fund capacity growth next year without having to go to credit markets.
It declared a December dividend of $0.40 per share but suspended its quarterly dividend for the next quarter and for 2009 due to the “highly volatile†state of the financial markets.
The situation will be re-evaluated during the year.
The parent company of brands such as P&O Cruises and Cunard Line in the UK, admitted to have suffered from a further slowdown in bookings during the recent financial markets’ turmoil.
Occupancy levels for the first half of 2009 are lagging behind the equivalent period this year, although booking values are “slightly higherâ€.
The US company said recent declines in fuel prices will result in a “significant benefit†to 2009 full year results.
Chairman and CEO Micky Arison said: “The company’s cash flow remain strong.
“However, in light of the unusually high cost of raising new capital, continuing concerns about financial institution liquidity and current uncertainties in the global economy, we believe that preserving cash is a prudent step which will further strengthen the company’s balance sheet and enhance our financial flexibility.â€
Carnival increased its 2008 earnings per share guidance based on revised currency exchange rates and fuel prices.
by Phil Davies
Phil Davies
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