$600m-$650m Q3 impairment
Company management evaluated these two ships 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, Carnival expects to record non-cash impairment charges during the third quarter in the range of $600m to $650m.
The company said it doesn’t expect these impairments to result in any material future cash expenditures.
The earlier nine ship exits include Carnival Fantasy and Carnival Inspiration, with Fantasy at the breakers at Aliaga, Turkey, and Inspiration en route to nearby Izmir; P&O Cruises’ Oceana to Greek ropax operator Seajets; Costa Victoria, reportedly to San Giorgio del Porto; Costa neoRomantica to Celestyal Cruises, Holland America Line’s Amsterdam and Rotterdam to Fred. Olsen Cruise Lines and Maasdam and Veendam to an undisclosed buyer.
Last week, Carnival Cruise Line reported Carnival Fascination and Carnival Imagination would move to a long-term lay-up status, with no specific timeline identified for a return to operation.