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Business News

Carnival sounds profits alarm as it cuts prices to recover from Concordia tragedy


Shares in cruise ship giant Carnival were hit today as moves to cut prices following a succession of PR catastrophes triggered a profit warning.

Carnival, the world's biggest cruise ship company, has been struggling since the Costa Concordia ran aground off the Italian coast in January last year, killing at least 30 people.

It suffered a further embarrassing setback earlier this year when an engine fire left its Carnival Triumph cruiser adrift at sea without power and sanitation, forcing more than 3000 passengers to endure unhygienic conditions as the ship was towed back to port. The industry has also seen several outbreaks of the norovirus vomiting bug on board ships this year.

Carnival's shares sank 379p, or 16 per cent, to 2013p today as the firm said booking volumes had risen but the price cuts would dent yields by up to 3 per cent. It slashed earnings per share guidance to between $1.45 and $1.65 against the previous $1.80-$2.10 guidance. The company operates 101 ships.

Shore Capital's Martin Brown said: "Elevated cancellations and greater levels of discounting appear to be the consequence of the PR disasters that have blighted Carnival this year.

"A period out of the front-page headlines and a demonstration  of strengthening yields are  clearly needed."