Carnival Slashes $194 million from its Q2 Bunker Bill as Earnings More Than Double

by Ship & Bunker News Team
Friday June 26, 2015

Cruise giant Carnival Corp. & Plc  [NYSE/LSE: CCL; NYSE: CUK] (Carnival) reports that its second quarter 2015 earnings more than doubled year-on-year, as its bunker bill shrunk by almost 37 percent compared to the same period last year.

Net income, which included unrealized gains of $34 million from its bunker hedging program, was $222 million compared to $98 million for the three months ended May 31 in 2014.

Fuel consumption for the period rose slightly to 810,000 metric tonnes (mt), compared to 802,000 mt period last year.

However the price paid for bunkers declined 37 percent to $411 per mt (pmt) for 2Q 2015 compared to $657 pmt last year, meaning overall spend for the latest period was $333 million, a saving of $194 million compared to 2Q 2014's total of $527 million.

"We more than doubled our second quarter earnings versus the comparable period a year ago and significantly exceeded our quarterly earnings guidance," commented Arnold Donald, President and CEO of Carnival.

"Our initiatives to create demand and leverage our scale benefited both cruise ticket prices and onboard revenues contributing to 5 percent revenue yield improvement (constant currency) this quarter.

Looking ahead for full year 2015, Carnival says it expects to buy 3.19 million mt of bunkers at an average price of $444 pmt, putting its annual bunker bill projection at $1.416 billion, a significant reduction over 2014's spend of $2.033 billion.

If achieved, the year-on-year savings of $617 million would also represent an improvement on its earlier savings estimate set last December when it said it expected its 2015 bunker bill to decrease by $475 million compared to 2014.

Earlier this month the company announced it had placed orders for its first liquified natural gas (LNG) powered vessels, telling Ship & Bunker it was a "bold move" but the "right move."