Miami-based cruise line operator
Carnival Corporation & plc (Carnival), in financials for the fiscal third quarter of 2016, which runs between 1st June and 31st August, has recorded a 23.2 percent decrease in bunker costs.
Bunker fuel expenses amounted to $265 million (down $80 million, or 23.2 percent), having been $345 million during the corresponding period in 2015.
The company paid an average of $335 per metric tonne (pmt) over the period compared with $439 pmt during the same quarter of 2015.
Bunker fuel consumption was at 793,000 tonnes, up slightly from 786,000 tonnes for this quarter last year.
Fuel consumption per available lower berth day (ALBD) in the third fiscal quarter of 2016 was down to 38.6 from 39.7 in 2015.
During the three months ended 31st August, unrealized net losses on fuel derivatives were $25 million compared with $137 million in 2015.
2016 forecast
Below is Carnival's fuel price and fuel consumption forecast for 2016.
Fourth-quarter 2016 forecast
Fuel price per metric tonne: $332
Fuel consumption (metric tonnes): 830,000
Full-year 2016 forecast
Fuel price per metric tonne: $285
Fuel consumption (metric tonnes): 3,250,000
Financial results
In its overall results for the third fiscal quarter of 2016, Carnival posted a record net income of $1,424 million, compared with $1,250 million during the prior-year period.
Revenues for the third quarter of 2016 were $5.1 billion, $0.2 billion higher than the $4.9 billion achieved in 2015.
Commenting on the results, Arnold Donald, Carnival Corporation & plc President and Chief Executive Officer, said: "We delivered the strongest quarterly earnings in our company's history affirming our ongoing efforts to expand consumer demand in excess of measured capacity increases and leverage our industry leading scale. Revenues during the peak summer season were bolstered by strong performances from both our North American and European brands and across all major deployments including the Caribbean, Alaska and Europe."
Fourth-quarter outlook
Fourth quarter constant currency net revenue yields are expected to be up approximately 3 percent compared to the prior year. Fourth quarter constant currency net cruise costs excluding fuel per ALBD are expected to be higher by approximately 1 percent.
Based on the above factors, the company expects adjusted earnings per share for the fourth quarter 2016 to be in the range of $0.55 to $0.59 versus 2015 adjusted earnings per share of $0.50.
Outlook
At this time, cumulative advance bookings for the first half of next year are ahead of the prior year at considerably higher prices. Since June, booking volumes for the first half of next year are lower than the prior year, as there is less inventory remaining for sale, at significantly higher prices.
Carnival continues to expect full year 2016 net revenue yields to be up approximately 3.5 percent compared to the prior year, on a constant currency basis. It also expects full year net cruise costs excluding fuel per ALBD to be up approximately 1.5 percent compared to the prior year, on a constant currency basis.
Taking the above factors into consideration, the company has increased its full year 2016 adjusted earnings per share guidance to be in the range of $3.33 to $3.37, compared to the June guidance range of $3.25 to $3.35 and 2015 adjusted earnings per share of $2.70.
Donald commented: "We are well on track to deliver nearly 25 percent earnings growth in 2016. With cash from operations expected to reach a record $5 billion this year, we continue to fund our growth and return cash to shareholders. During the third quarter we repurchased $700 million of Carnival Corporation shares bringing the cumulative total to $2.5 billion in share repurchases over the past year."
Donald added: "Looking forward, we are well positioned for continued earnings growth given the current strength of our booking and pricing trends in 2017."
