Cruise company in profits warning

Carnival cruiseCarnival, the world's largest cruise company, issued its second warning of sinking profits in less than three months as revenues fell and voyage cancellations increased in the wake of a series of major mishaps on its ships.

Shares were down nearly 13% in London after the company said full-year revenues, which were expected to be flat, would fall 2-3%, while earnings would also be hit. The expectations were also reduced in March when Carnival downgraded its hopes for revenue growth for the year.

The company operates 101 ships under a number of brands across the world, including P&O, Cunard and Costa Cruises. It suffered a major blow in 2012 when the Costa Concordia ran aground with thousands of passengers on board off the coast of Italy - claiming 32 lives.

Since then, Carnival has been dogged by further problems on its cruise ships.
In March last year, the Costa Allegra drifted without power for three days in the Indian Ocean after a fire on board, before having to be towed into port in the Seychelles.

In February this year, chief executive Gerry Cahill had to apologise to 4,200 passengers on the Carnival Triumph after it was left adrift for five days in the Gulf of Mexico. They were faced with overflowing toilets and scarce food.

The following month, a Caribbean cruise on the Carnival Dream was cut short after what was described as a "technical issue" involving a malfunction of the ship's backup diesel generator.

Shortly afterwards, the Carnival Legend had to limp back to Florida during another Caribbean cruise after a technical fault.

The operator said booking volumes had been driven up by its latest price offer but this had led to lower-than-expected revenues.

It also said it had been hit by "voyage cancellations beyond those incorporated in the company's previous guidance".

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