Carnival Corp & plc forecasts 50% rise in current year earnings compared to 2013

Carnival Corp & plc, the world's largest cruise shipping group, said cumulative advance bookings for the first three quarters of 2015 are ahead of the prior year at slightly higher prices. "Since September, booking volumes for the first three quarters of 2015 are running ahead of last year’s levels at slightly lower prices driven by transactional currency impacts," the company said in a statement.

Arnold Donald, President and CEO of the group noted: “Based on our current 2015 guidance, we expect to achieve a 50% improvement in earnings compared to financial year) 2013 and are firmly on a path toward delivering double-digit returns on invested capital.”

He continued: “The current base of business for 2015 builds confidence in our expectation of continuing yield growth with acceleration in yield improvement starting in the second quarter.”

Based on current booking trends, the company forecasts full year 2015 net revenue yields, on a constant dollar basis, to be up approximately 2 percent compared to the prior year. First quarter revenue yields (constant dollars) are expected to be slightly higher than the prior year and improve during the remainder of 2015.

The company expects net cruise costs excluding fuel per ALBD, on a constant dollar basis, for full year 2015 to be up approximately 3 percent primarily due to higher dry-dock costs, advertising expenses and product enhancements.

Based on current spot prices for fuel, forecasted fuel costs for the full year 2015 are expected to decrease $475 million compared to 2014, net of fuel derivatives, benefiting the company by $0.61 per share. This is forecasted to be partially offset by unfavorable movements in currency exchange rates worth $0.20 per share (includes both translational and transactional currency exchange impacts). Taking the above factors into consideration, the company forecasts full year 2015 non-GAAP diluted earnings per share to be in the range of $2.30 to $2.60, compared to 2014 non-GAAP diluted earnings of $1.96 per share.

First quarter 2015 outlook

First quarter constant dollar net revenue yields are expected to be flat to up 1.0 percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the first quarter are expected to be 5.5 to 6.5 percent higher on a constant dollar basis compared to the prior year and are higher than full year guidance mostly due to the timing of expenses between quarters.

Current currency exchange rates and fuel prices net of fuel derivatives are expected to benefit first quarter earnings by $130 million compared to the prior year, or $0.16 per share. Based on the above factors, the company expects non-GAAP diluted earnings for the first quarter 2015 to be in the range of $0.07 to $0.11 per share, compared to 2014 non-GAAP earnings of $0.00 per share.

Carnival Corp & plc 2013 financial year net income rises to $1.2 billion

Carnival Corporation & plc has announced full year 2014 U.S. GAAP net income of $1.2 billion, or $1.59 diluted EPS, which included unrealized losses (non-cash) on fuel derivatives of $268 million and $20 million of net charges.

Full year 2013 U.S. GAAP net income was $1.1 billion, or $1.39 diluted EPS, which included net unrealized gains (non-cash) on fuel derivatives of $36 million and impairments and other charges of $190 million.

Revenues for the full year 2014 were $15.9 billion compared to $15.5 billion for the prior year. Cash from operations for the full year 2014 totaled $3.4 billion compared to $2.8 billion in 2013.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “Full year earnings were significantly higher than the prior year primarily due to strong profit improvement at both our Carnival Cruise Lines and Costa Cruises brands. We enjoyed some early wins from our collaboration efforts that contributed to our improved results, particularly for onboard revenues. 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. We also made a number of strategic decisions in fleet investments that will position us well for the future.”

Commenting on the fourth quarter Donald stated, “Last quarter operating profit more than doubled due to higher ticket prices and onboard spending combined with lower costs, also exceeding previous guidance.” During the quarter, the Carnival Cruise Lines brand achieved a significant increase in revenue yields despite a highly competitive environment in the Caribbean. Additionally, Costa’s Asia operations achieved double-digit revenue yield improvement on a capacity increase in that region.

New ship introductions during the quarter generated substantial media coverage and positive buzz including the star-studded North American debut of Regal Princess which featured a reunion of the Love Boat cast and numerous guest stars who appeared on the hit TV show, as well as the delivery of Costa Diadema at a stunning and festive inaugural in Genoa, Italy. The company also recently placed orders with Italian shipbuilder Fincantieri for three innovative new ships for its Carnival Cruise Lines, Holland America Line and Seabourn brands to be delivered in 2018. In addition, the company recently sold three of its smaller vessels – Costa Celebration, Grand Holiday and Ocean Princess.

CBR Odo Commentary – Opening of Cuba to US cruising could have far reaching implications

The opening of Cuba for cruise passengers from the US could have far reaching consequences for the cruise industry in the region.

On Wednesday, the US and Cuba agreed to restore diplomatic ties for the first time since 1961 and the US agreed to ease travel restrictions between the two countries. However, it was not immediately known what this would mean in practice.

We think the cruise industry would be a major beneficiary from lifting of all travel restrictions currently imposed by the US government on its citizens.

Cuba’s tourism infrastructure would be unlikely to be able to cope with an influx of large numbers of Americans wishing to visit the country. Cruise ships would be able to overcome this be offering itineraries with overnight stays; Cuba is located only some 90 miles south of Florida, which would allow this on even short duration itineraries.

Cuba is virtually the only island in the Caribbean that can offer city destinations to visiting tourists, which could broaden the appeal of the region.

The introduction of Scandinavian style cruise ferries that carry passengers in good quality accommodations and their vehicles plus roro freight, could also be on the cards.

It is possible that the availability of berthing facilties in major locations, such as Havana, could pose some problems to cruise lines should the demand for cruises thsat visit Cuba reach a high level in a short period of time, which we think could be the case.

The opening of Cuba would, quite likely, have a negative impact of cruise tourism in the Bahamas as many lines would probably replace Nassau with Havana on their itineraries.

Fincantieri wins Carnival Cruise Lines, Holland America Line orders

Fincantieri, the Italian shipbuilder, said it has been awarded an order by Carnival Corporation & plc for the construction of two new cruise ships for Carnival Cruise Line and Holland America Line.

Both will be sisters ships respectively to Carnival Vista and Koningsdam, both currently under construction at Fincantieri shipyards.

The Carnival Cruise Lines' ship, the 26th unit in line’s fleet, with a gross tonnage of 133,500 will have capacity for 3,954 passengers and will enter service in the spring 2018. The Holland America Line ship, a second Pinnacle class unit, will have a gross tonnage of 99,500 and accommodation for 2,650 passengers and will be delivered in autumn 2018, the company said in a statement.

US, Cuba restore diplomatic ties, travel restrictions eased, cruise shipping shares gain

The US and Cuba have agreed to restore diplomatic ties, which sent shares in listed cruise shipping groups sharply higher. However, it is not yet known what promised easing of travel restrictions would mean in practice.

The United States and Cuba agreed on Wednesday to restore diplomatic ties that Washington severed more than 50 years ago, and President Barack Obama called for an end to the long economic embargo against its old Cold War enemy, the Reuters news agency reported yesterday.

“Travel restrictions that make it hard for most Americans to visit will be eased, but the door will not yet be open for broad U.S. tourism on the Caribbean island,” Reuters said.

“Obama's announcement also will not end the U.S. trade embargo that has been in force for more than 50 years. That is codified in legislation and needs congressional approval. Obama said he would seek that approval but likely faces a struggle,” the news agency stated.

However, it was not immediately clear what the warming of relations between the two countries that are separated only by 90 miles of sea would mean in practice.

Shares in listed cruise shipping companies, however, rose sharply on the news. Norwegian Cruise Line Holdings gained 4.57% to close at $45.76, Carnival Corp rose 3.46% to $44.61 in New York, while Carnival plc in London firmed 1.1% to finish trading at £28.01. Royal Caribbean Cruises Ltd (RCCL) rallied 6.62% to $81.54 and 0.7% to NOK585.0 in Oslo. The news came late in the day in Europe, which explains the smaller gains in European listed shares than those quoted in the US.

Alternative flash content


Viking Star