The company faces risks from fluctuating interest rates, foreign currency exchange rate volatility, and fuel price fluctuations. Debt covenants and compliance with lender requirements are crucial, with potential defaults leading to significant financial strain. Ship construction delays, cancellations, and macroeconomic conditions pose risks to capital expenditures and cash flow. Litigation, including the Helms-Burton Act lawsuit, and other legal proceedings, present potential liabilities. Customer chargebacks and credit card processor demands for collateral could impact liquidity.
Financial Upside
Strong consumer demand, particularly for 2025 sailings, suggests a positive outlook for bookings. Margin enhancement initiatives aim to improve cost structure and profitability. New ship deliveries increase capacity and revenue potential. The company has substantial liquidity, including undrawn credit facilities and commitments, to support operations and future growth. The acquisition of IMA could optimize newbuild expenditures.
