Carnival Corporation & plc. reports that fuel expenses plummeted $173 million, or 33.4 percent, during the three months ended August 31, 2015, compared to the previous year.
Bunker fuel expenses amounted to $345 million between June and August, having been $518 million during the corresponding period in 2014.
Bunker fuel consumption fell by 11,000 tonnes, or 1.4 percent, to 786,000 tonnes, down from 797,000 tonnes last year. The figure was 4,000 tonnes below the June guidance forecast level of 790,000 tonnes.
The average fuel cost per metric tonne consumed plummeted $211, or 32.4 percent, to $439 per tonne, down from $650 per tonne during the three months ended August 31, 2014. The latest quarterly figure was $53 lower than the June guidance price of $492 per metric tonne.
Fuel consumption per available lower berth day (ALBD) in the third fiscal quarter of 2015 fell to 0.040, down from 0.041 in 2014.
Unrealized net losses on fuel derivatives were $137 million compared to a net gain of $15 million in 2014. Realized net losses were $60 million compared to a net gain of $1 million during the same period last year.
2015 forecast
Please find below Carnival's fuel price and fuel consumption forecast for 2015.
Fourth-quarter 2015 forecast
Fuel price per metric tonne: $366
The average fuel price per metric tonne during the fourth quarter of 2014 was $584 per tonne.
Fuel consumption (metric tonnes): 810,000
The amount consumed during the fourth quarter of 2014 was 794,000 tonnes.
Full-year 2015 forecast
Fuel price per metric tonne: $405
The figure is $231 per tonne lower than Carnival's $636 per tonne average purchasing price in 2014. It is also $39 below the company's June $444-per-tonne full-year forecast and $1 lower than March's $406-per-tonne prediction.
Fuel consumption (metric tonnes): 3,190,000
The figure is 4,000 tonnes lower than the 3,194,000 tonnes purchased by Carnival in 2014. Is is the same as the company's June and March full-year forecasts.
Financial results
In its overall results for the second quarter of 2015, Carnival posted a non-GAAP net income of $1.4 billion, or $1.75 diluted earnings per share (EPS) compared to non-GAAP net income for the third quarter of 2014 of $1.2 billion, or $1.58 diluted EPS.
U.S. GAAP net income, which included unrealized gains on fuel derivatives of $137 million, was $1.2 billion, or $1.56 diluted EPS. Last year, second quarter U.S. GAAP net income was $1.2 billion, or $1.60 diluted EPS.
Revenues for the third quarter of 2015 were $4.883 billion compared to 4.947 billion the previous year.
Commenting on the results, Carnival Corporation & plc President and CEO,
Arnold Donald, said: "Our third quarter non-GAAP performance was the strongest of any quarter on record with earnings $0.17 per share higher than the prior year despite a slight drag from the net impact of fuel prices and currency. Non-GAAP earnings for the quarter were also $0.17 higher than the mid-point of prior guidance. Net revenue yields improved 5 percent (constant currency) from the prior year benefiting from strong demand which led to higher occupancy levels, increased ticket prices and increased onboard spending. Clearly our ongoing investments in the guest experience, combined with our global marketing and public relations efforts along with our initiatives to leverage our scale are having a positive impact."
Fourth-quarter 2015 outlook
Fourth quarter constant currency net revenue yields are expected to be up approximately 3 percent compared to the prior year (up approximately 1 percent in constant dollars). Net cruise costs excluding fuel per ALBD for the fourth quarter are expected to be higher by approximately 3 percent on a constant currency basis compared to the prior year (up approximately 2 percent in constant dollars).
Based on the above factors, the company expects non-GAAP diluted earnings for the fourth quarter 2015 to be in the range of $0.36 to $0.40 per share versus 2014 non-GAAP earnings of $0.27 per share.
2015 outlook
Based on the strength in third quarter net revenue yields and current booking trends, the company has increased its expectations for full year 2015 net revenue yields. The company now expects revenue yields to be up approximately 4 percent compared to the prior year versus previous guidance of up 3 to 4 percent on a constant currency basis, which excludes translational and transactional currency impacts (up approximately 3 percent on a constant dollar basis). The company continues to expect full year 2015 net cruise costs excluding fuel per ALBD to be up approximately 3.5 percent compared to the prior year on a constant currency basis (up approximately 3 percent on a constant dollar basis).
Taking the above factors into consideration, the company has increased its full year 2015 non-GAAP diluted earnings per share guidance to be in the range of $2.56 to $2.60, better than both the June guidance range of $2.35 to $2.50 and 2014 non-GAAP diluted earnings of $1.93 per share.
Donald stated: "In 2015, we are on track to achieve a nearly 35 percent earnings improvement and we are accelerating progress toward achieving double digit return on invested capital in the next three to four years. Our improved performance has driven even stronger operating cash, which is expected to exceed $4 billion this year. We remain committed to further enhancing shareholder returns as demonstrated by our recent 20 percent increase in quarterly dividends."
During the last quarter, fleet-wide booking volumes for the first half of 2016 were running nearly 20 percent higher than the prior year relative to a capacity increase of less than 3 percent, at lower constant dollar prices. At this time, cumulative advance bookings for the first half of 2016 are well ahead of last year at lower constant dollar prices.
Donald added: "Looking forward to 2016, we have driven a significant lengthening of the booking curve and have less inventory remaining for the first half of 2016 than at this time last year, which bodes well for continued year-over-year revenue yield improvement. Although we already have a solid base of business for next year, we are working hard to maintain the momentum through our ongoing initiatives to create additional demand."
Image: Carnival Dream.
