Bunkers and Currency Drive RCL's Q2 Earnings Increase

The company anticipates full year earnings of almost 40 percent above 2014.

Royal Caribbean Cruises Ltd. credits currency and fuel as the biggest drivers of a 26 percent increase in second quarter earnings for 2015, the company reports.

Royal Caribbean's Q2 adjusted net income was $185.0 million, compared to $146.7 million for Q2 2014.

The company notes that "currency and fuel were the biggest drivers of the earnings increase versus guidance" but it also pointed out that a net yield increase of 4.2 percent was "better than expected, mainly driven by close-in pricing in the Caribbean and China."

Net cruise costs excluding fuel increased 3.4 percent, better than guidance mainly due to the timing of shipboard projects.

Bunker pricing net of hedging for Q2 2015 was $599 per metric ton with consumption of 338,000 metric tons, and based on current fuel prices Royal Caribbean has included $210 million and $818 million of fuel expense in its Q3 and full year 2015 guidance, respectively.

The company anticipates full year earnings of almost 40 percent above 2014, with projected capital expenditures of $1.6 billion and a capacity increase of 5.4 percent.

Jason T. Liberty, chief financial officer for Royal Caribbean, said that "Momentum in the Caribbean continues at a solid pace, and our strong booked position in the third and fourth quarters gives us confidence as we move through the second half of 2015.

"The trajectory of our brands is firmly on course for another record year of earnings, with healthy trends extending into the first quarter of 2016."

Fuel savings is an on-going business objective of Royal Caribbean, and last year it reported that its third Oasis-class cruise ship, currently under construction in France, will be approximately 20 percent more energy efficient than its two existing Oasis class vessels.