Royal Caribbean Cruises Ltd. has confirmed that bunker fuel consumption during the second quarter of 2013 was 6,400 metric tonnes lower than expected at 333,600 metric tonnes. In comparison with the previous quarter, fuel consumption declined by 12,300 tonnes, or 3.6 percent, down from 345,900 metric tonnes.
The company's average bunker price net of hedging during the second quarter was $697 per metric tonne, down from $699 per metric tonne during the first three months of 2013.
In its fuel expense and guidance summary for 2013, Royal Caribbean provided its fuel cost calculations based on current at-the-pump prices, net of hedging impacts. Based on today's fuel prices the company has included $219 million and $923 million of fuel expense in its third quarter 2013 and full year 2013 guidance, respectively.
Forecasted consumption is now 60% hedged via swaps for the remainder of 2013 and 55%, 39%, 20% and 5% hedged for 2014, 2015, 2016 and 2017, respectively. For the same five-year period, the average cost per metric tonne of the hedge portfolio is approximately $576, $620, $647, $623 and $640, respectively.
Royal Caribbean provided the following fuel statistics for the third quarter and full year 2013:
| Statistics | Third Quarter 2013 | Full Year 2013 |
| Fuel Consumption (metric tonnes) | 329,000 | 1,346,00 |
| Fuel Expenses | $219 million | $923 million |
| Percent Hedged (fwd consumption) | 56% | 60% |
| Impact of 10% change in fuel prices | $9 million | $16 million |
In its financial results for the second quarter of 2013, Royal Caribbean posted a net income of $24.7 million, or $0.11 per share, versus a loss of ($3.7 million) or ($0.02) per share, in the second quarter of 2012.
Net yields on a constant currency basis increased by 2.8% for the quarter. Ticket revenue for the second quarter came in as expected, while on-board revenue was said to have outperformed expectations. Excluding the affinity card adjustment, constant currency net yields in the quarter increased by 3.9% versus the previous year.
Commenting on the results,
Richard D. Fain, chairman and chief executive officer, said: "It is rewarding to see things coming together. While the operating environment has been frustrating, our bookings trajectory is looking good and I'm thrilled to see our cost initiatives beginning to pay off. Exploiting this positive momentum will help us take our returns and our profitability to the next level."
Image: Royal Caribbean's cruise vessel Vision of the Seas.
