Story courtsey: USA Today
Carnival Corp., parent company of Costa Cruises, says the partial sinking of the Costa Concordia off the coast of Italy could cost it nearly $100 million in lost earnings this year.
The Costa Concordia lies in the harbor of the Tuscan island of Giglio Jan. 15, 2012 after running aground.
In a disclosure required by rules governing publicly traded companies, industry giant Carnival (CCL) said Monday that the impact to 2012 earnings for loss of use of the ship is expected to be approximately $85million to $95 million or 11 cents to 12 cents per share.
“A damage assessment review of the vessel is currently being undertaken to determine how long it will be out of service,” the Miami-based company said. But “the vessel is expected to be out of service for the remainder of our current fiscal year if not longer.”
Carnival’s fiscal year ends Nov. 30.
In addition to loss of use of the vessel, Carnival faces costs associated with personal injury liability related to the accident and the cost of damage to the ship.
The company said it has insurance for damage to the vessel with a deductible of approximately $30 million as well as insurance for third-party personal injury liability subject to an additional deductible of approximately $10 million for the incident.
The company said it faces other costs from the accident that “are not possible to determine at this time.”
Carnival is the world’s largest cruise company, with more than 100 vessels spread among nearly a dozen brands, including Carnival, Costa, Princess, Holland America and Cunard.
In a statement accompanying the disclosure, Carnival chairman and CEO Micky Arison said the company’s priority is the safety of its passengers and crew.
“We are deeply saddened by this tragic event, and our hearts go out to everyone affected by the grounding of the Costa Concordia and especially to the families and loved ones of those who lost their lives,” he said. “They will remain in our thoughts and prayers.”
Shares of Carnival stock, which is listed both in London and New York, plunged 20% in early trading Monday in London.
