Carnival Expects to Save $475 million on Bunker Costs in 2015

Carnival says it expects to achieve a 50 percent improvement in earnings compared to 2013

Carnival Corporation & plc [NYSE/LSE: CCL; NYSE: CUK] (Carnival) says that based on current spot bunker prices it expects its full year 2015 bunker bill to decrease by $475 million over 2014's spend of $2.033 billion.

Prior to the recent collapse of oil prices, the company had said it expected 2015's North America Emission Control Area (ECA) requirements to "significantly impact" its fuel costs and cited the new rules as reason for its now reversed decision to exit Norfolk and Baltimore.

Writing in its recent full year 2014 results, in which it reported full-year revenues of $15.9 billion, up from last year's $15.5 billion, Carnival said bunker consumption for the full year was almost 5 percent compared to the year prior, but did not expand on reasons behind the savings.

However the cruise company did note the price it paid for fuel declined 13 percent to $584 per metric tonne (pmt) in the forth quarter, from $671 pmt in 4Q 2013 and substantially lower than the September guidance of $635 pmt.

"We worked hard to contain costs and achieved an almost five percent reduction in fuel consumption for the year as we continue to implement energy conservation measures," noted Carnival's President and Chief Executive Officer Arnold Donald.

"We also made a number of strategic decisions in fleet investments that will position us well for the future."

In its outlook for 2015, Carnival said it expected to achieve a 50 percent improvement in earnings compared to 2013, and bunker consumption to dip slightly to 3.17 million metric tonnes (mt), from 2014's total of 3.19 million mt.

The average price it expects to pay for bunkers in 2015 is $436 pmt, Carnival said, down from $636 pmt in 2014 and $676 pmt in 2013.

Earlier this year Carnival said it was more than doubling its number of scrubber installations across its fleet.