Shares in US cruise operator Carnival (CCL) rose 9% to 804p in mid-morning trading as it flagged it had $11.7bn in untapped liquidity to see it through the coronavirus outbreak.

In a first-quarter update to 29 February, Florida-based Carnival said the $11.7bn includes $3bn of immediate liquidity, $2.8bn from credit facilities which were available originally to fund planned ship deliveries for this year, and $5.9bn in credit facilities for ship deliveries in 2021 and beyond.

Last Friday, it fully drew down its $3bn multi-currency revolving credit facility.

MOST ASSETS 'PLEDGED AS COLLATERAL'

In a sign of the times it added that 'substantially all' of its assets, with the exception of certain ships with a net book value of approximately $6bn as of February 29, ‘are currently available to be pledged as collateral.’

Carnival, the world’s largest cruise line, also said it is is ‘taking additional actions to improve its liquidity, including capital expenditure and expense reductions, and pursuing additional financing.’

The firm reported a net loss of $781m or, the all-important metric for Wall Street investors, a loss of $1.14 of diluted earnings per share (EPS) for the first quarter of 2020, compared to net income for the first quarter of 2019 of $336m, using American generally accepted accounting principles (GAAP) standards.

Total revenues for the quarter were $4.8bn, marginally higher than the $4.7bn reported in the same period last year.

On an adjusted basis, Carnival said it made first-quarter net income of $150m, or $0.22 adjusted EPS, compared to adjusted net income of $338m or $0.49 adjusted EPS the previous year.

First quarter adjusted net income excluded net charges of $932m and net charges of $2m for the first quarter of 2019.

The company has also been praised in America for offering to turn cruise ships from four its brands into floating hospitals in the US if needs be.

It comes after a conversation between Carnival chairman Micky Arison and US president Donald Trump, in which Carnival offered to use its ships to mostly serve non-coronavirus hospital patients, in order to free up beds in land-based hospitals for virus patients. Each ship can offer up to 1,000 hospital rooms.

Regarding the impact of the coronavirus on this year's earnings, Carnival said that ‘given the uncertainty of the situation, the corporation is currently unable to provide an earnings forecast, however it expects a net loss on both a U.S. GAAP and adjusted basis for the fiscal year ending November 30, 2020.’

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Issue Date: 20 Mar 2020