Royal Caribbean Cuts 2013 Bunker Cost Forecast

The Celebrity Millennium had mechanical problems that forced the cancellation of several sailings

Royal Caribbean Cruises Ltd. [NYSE, OSE: RCL] (Royal Caribbean) revised its expected bunker costs for the full year 2013 by $3 million, citing energy conservation measures and the unscheduled drydock of its Celebrity Millennium cruise ship.

"We are beginning to see the payoff from our efforts to improve returns during these challenging times," said Richard D. Fain, chairman and chief executive officer. 

"We have a ways to go, but our strategy and our investments are driving higher revenues and achieving cost efficiencies that bode well for 2014 and beyond."

The company cancelled several cruises of the Millennium due to mechanical problems, USA Today reported at the time.

For the third quarter of the year, the company increased its revenues to $2.3 billion, compared with $2.2 billion for the same period last year, while its profits fell to $365.7 million from $367.8 million.

The company said its fuel costs rose 1 percent in year-over-year in the third quarter to $215.7 million, as it consumed 323,000 metric tonnes (mt) of fuel at a bunker price net of hedging of $668 per mt.

Royal Caribbean said it anticipates total 2013 spending on fuel will hit $920 million for 1.3 million mt, while fuel expenses for the fourth quarter will be $230 million and consumption will be 337,900 mt.

The company said its ticket revenue in Europe exceeded expectations in the third quarter, and it experienced more close-in demand for sailings in China than expected, helping to offset the cost of the Millennium drydock.

The company reported in July that it had used less fuel than expected in Q2.