Tue 19 Jun 2012 13:40

'Buy' ratings for cruise lines on falling bunker prices




The cruise industry has experienced a slowdown in business as a result of growing concerns of a potential recession in Europe. Yet some investment analysts remain keen on the industry as falling fuel prices could help significantly boost companies' profits this year.

Investment bank Jefferies has "buy" ratings on both Carnival Corp. and Royal Caribbean Cruises Ltd. Operators' profits could rise by as much as 25 percent as a result of low prices for bunker fuel, analysts at Jeffries said in a recent note.

Growing concerns of a potential recession in Europe, which accounts for roughly 20 percent of the world's consumption of oil, has seen oil prices slide to eight-month lows on Tuesday. Since early May oil prices have fallen nearly 24 percent on fears that the global economy is slowing.

According to market research firm Five Star Equities, sliding oil prices likely saw Carnival's average fuel costs for this quarter drop to approximately $735 per tonne. The cruise line had expected to pay $772 per tonne when it calculated its second-quarter earnings guidance. Jefferies analysts stated that the lower fuel costs would increase Carnival's 2012 per-share earnings by around 25 percent.

Royal Caribbean Cruises Ltd. is the world's second largest cruise company, operating the Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France brands. The company reported improved revenues to $1.8 billion in the first quarter of 2012 compared to $1.7 billion in the first quarter of 2011 as a result of capacity increases and yield improvements.

Opening of the IMO Marine Environment Protection Committee (MEPC), 83rd Session, April 7, 2025. IMO approves pricing mechanism based on GHG intensity thresholds  

Charges to be levied on ships that do not meet yearly GHG fuel intensity reduction targets.

Preemraff Göteborg, Preem's wholly owned refinery in Gothenburg, Sweden. VARO Energy expands renewable portfolio with Preem acquisition  

All-cash transaction expected to complete in the latter half of 2025.

Pictured: Biofuel is supplied to NYK Line's Noshiro Maru. The vessel tested biofuel for Tohoku Electric Power in a landmark first for Japan. NYK trials biofuel in milestone coal carrier test  

Vessel is used to test biofuel for domestic utility company.

Pictured (from left): H-Line Shipping CEO Seo Myungdeuk and HJSC CEO Yoo Sang-cheol at the contract signing ceremony for the construction of an 18,000-cbm LNG bunkering vessel. H-Line Shipping orders LNG bunkering vessel  

Vessel with 18,000-cbm capacity to run on both LNG and MDO.

Stanley George, VPS Group Technical and Science Manager, VPS. How to engineer and manage green shipping fuels | Stanley George, VPS  

Effective management strategies and insights for evolving fuel use.

Sweden flag with water in background. Swedish government bans scrubber wastewater discharges  

Discharges from open-loop scrubbers to be prohibited in Swedish waters from July 2025.

The ME-LGIA test engine at MAN's Research Centre Copenhagen. MAN Energy Solutions achieves 100% load milestone for ammonia engine  

Latest tests validate fuel injection system throughout the entire load curve.

Terminal Aquaviário de Rio Grande (TERIG), operated by Transpetro. Petrobras secures ISCC EU RED certification for B24 biofuel blend at Rio Grande  

Blend consisting of 24% FAME is said to have been rigorously tested to meet international standards.

Avenir LNG logo on sea background. Stolt-Nielsen to fully control Avenir LNG with acquisition  

Share purchase agreement to buy all shares from Golar LNG and Aequitas.

Seaspan Energy's 7,600 cbm LNG bunkering vessel, s1067, built by Nantong CIMC Sinopacific Offshore & Engineering Co., Ltd. Bureau Veritas supports launch of CIMC SOE's LNG bunkering vessel  

Handover of Seaspan Energy's cutting-edge 7,600-cbm vessel completed.


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