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Royal Caribbean Cruises Ltd - the world's second-largest cruise operator - says that it expects to consume 1,382,000 metric tonnes of bunker fuel in 2015 and 344,000 metric tonnes during the second quarter.

In its fuel expense and guidance summary for 2015, 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 $213 million and $834 million of fuel expense in its second quarter and full year 2014 guidance, respectively.

Forecasted consumption is 52% hedged via swaps for the remainder of 2015 and 55%, 40% and 20% hedged for 2016, 2017 and 2018, respectively. For the same four-year period, the average cost per metric tonne of the hedge portfolio is approximately $638, $562, $540 and $503, respectively.

Royal Caribbean provided the following fuel statistics for the second quarter and full year 2015:

Statistics	Second Quarter 2015	Full Year 2015
Fuel Consumption (metric tonnes)	344,000	1,382,000
Fuel Expenses	$213 million	$834 million
Percent Hedged (fwd consumption)	52%	52%
Impact of 10% change in fuel prices	$7 million	$22 million

Q1 results

In its financial results for the first quarter of 2015, Royal Caribbean spent $205,276,000 on bunker fuel compared to $244,459,000 during the corresponding period last year, which represents a decrease of $39,183,000, or 16%.

Bunker pricing net of hedging for the first quarter was $597 per metric tonne and consumption was 344,000 metric tonnes.

The cruise line also revised its adjusted earnings per share (EPS) guidance as a result of the stronger dollar and rising fuel prices.

"The company has updated full year adjusted EPS guidance to a range of $4.45 to $4.65 from $4.65 to $4.85. The strengthening of the US dollar and the increase in fuel prices since our January guidance is expected to negatively impact earnings by $0.36," Royal Caribbean said in its quarterly report.

During the company's earnings call on April 20, Jason Liberty, CFO, commented: "Since our January earnings call, the dollar has strengthened 3.5% versus our basket of currencies and fuel prices have increased approximately 14%. Together, these two factors represent a $0.36 headwind to earnings per share.

"Our fuel costs for the year have increased to $834 million from $806 million during our January earnings call. While this is an increase from the previous guidance, fuel costs remain down year-over-year by $104 million. Consumption is down approximately 18,000 tonnes from previous guidance driven by better-than-expected results from a laundry list of fuel consumption initiatives. We are 52% hedged for the remainder of the year and that is a price of $638 per metric tonne.

"Taking into account all we've just told you, and based on current fuel prices, interest rates and currency exchange rates, we have updated our adjusted earnings per share guidance to be between $4.45 and $4.65 for the year."

The adjusted EPS guidance came despite Royal Caribbean reporting a 71% rise in net income for the first three months of the year to $45.230 million, up from $26.457 million in 2014. Total revenues fell by 3.8% to $1.815 billion, down from $1.887 billion.

Commenting on the results, Richard D. Fain, chairman and chief executive officer, remarked: "It is gratifying to post another strong quarter with both revenues and expenses exceeding expectations. Despite ongoing volatility in the currency and fuel markets, our Double-Double program remains solidly on track."

"The business continues to perform well, despite the currency volatility," said Jason Liberty. "Our unwavering commitment to cost consciousness has helped us identify further efficiencies that are driving a significant shift in our cost guidance for the full year. This type of operational focus throughout all facets of our business is a core enabler of our continued financial success."