17 Jan 2012

Sinking could cost cruise company $US95 million

8:47 am on 17 January 2012

The sinking of the Costa Concordia could cost parent firm Carnival up to $US95 million.

Carnival shares fell 18% in early trading after the company said in a statement that it expected the loss of earnings from the capsizing to be between $US85 - $US95 million.

The ship ran aground on Friday night off the coast of Italy, killing six people.

''The vessel is expected to be out of service for the remainder of our current fiscal year if not longer,'' Carnival said in a statement to the London Stock Exchange.

''For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95m or $0.11-$0.12 per share.''

Analysts believe the capsizing could affect holiday plans for potential cruise customers.

Carnival said it had insurance coverage for damage to the vessel with an excess of $US30 million.

The BBC reports Carnival Corporation is the world's largest cruise ship operator. It owns 11 brands, including P&O, Cunard and Princess Cruises.

It is a dual-listed company, with headquarters in Southampton in Britain and Miami in the United States.

Carnival plc has responsibility for Costa Cruises, Carnival Cruises and Holland America Line.