Carnival reports it self-insures for loss of use of sunken Costa Concordia vessel
Carnival Corp., operator of the grounded Costa Concordia, has addressed the financial implications of the incident that saw the 290-metre long ship sink off the coast of western Italy on January 13, killing at least five.
The company reports it has insurance coverage for damage to the vessel with a deductible of approximately $30 million. Coverage for third-party personal injury liability is subject to an additional deductible of approximately $10 million for this incident. The company self-insures for loss of use of the vessel.
A damage assessment review of the vessel is currently being undertaken to determine how long it will be out of service. The vessel is expected to be out of service for the remainder of the current fiscal year, if not longer. For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share.
“At this time, our priority is the safety of our passengers and crew,” said Micky Arison, Carnival Corporation & plc chairman and CEO. “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. They will remain in our thoughts and prayers,” he said.
