Carnival Raises Revenues, Reduces Bunker Costs

Carnival said fuel savings are helping it, despite economic uncertainty in Europe

Miami-based cruise operator Carnival Corporation & Plc. [NYSE:CUK, NYSE:CCL] (Carnival) reports that it spent less on fuel for the three months ended February 28, 2013 than it in the same period last year as bunker prices fell and the vessels used less fuel.

Its bunker bill for the company's first quarter fell 5.5 percent year-on-year to $559 million from $592 million, with fuel consumption falling to 827,000 metric tonnes (mt) from 837,000 mt, and the average price it paid for bunkers dropping by $30 to $677 per metric tonne (pmt).

Revenues for the period rose slightly, to $3.59 billion from $3.58 billion, and the bottom line swung from a loss of $139 million to a profit of $37 million.

The performance improvement was largely due to goodwill and trademark impairment charges of $173 million incurred in Q1 2012, which the company said at the time were related to the slow growth of subsidiary Ibaro Cruises due to a tough Spanish economy.

Looking into the rest of the year, the company said bookings are behind last year while prices are steady.

"Booking volumes during our seasonally strong wave period have remained solid with pricing comparisons improving in recent weeks," said Chairman and CEO Micky Arison.

"However, economic uncertainty in Europe continues to hinder yield growth."

Arison noted that there has been "considerable attention" to the stranding of the Carnival Triumph in the Gulf of Mexico, but he said booking volumes have recovered significantly in recent weeks.

"We expect to drive return on invested capital higher through a measured pace of capacity growth and a continued focus on fuel consumption savings," he said.