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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Carnival's annual bunker costs down $175 million

Cruise operator consumed 72,000 tonnes less fuel and recorded a $40 decrease in the average fuel cost per metric tonne during its last fiscal year.



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Updated on 22 Dec 2014 09:43 GMT

Carnival Corporation & plc. reports that fuel expenses for the 12 months ended November 30 were down by US$175 million, or 7.9 percent, to $2,033 million compared to $2,208 million last year.

Carnival consumed 3,194,000 tonnes of fuel during the aforementioned 12-month period compared to 3,266,000 tonnes the previous year, which represents a decrease of 72,000 tonnes, or 2.2 percent.

The average fuel cost per metric tonne was down by $40, or 5.9 percent, to $636 per tonne, down from $676 per tonne in 2013.

Fuel consumption per available lower berth day (ALBD) fell by 4.5 percent to 0.042, down from 0.044 the previous year.

Net losses on fuel derivatives were $271 million compared to a net gain of $36 million last year.

Fourth quarter fuel statistics

Fuel costs decreased by $85 million, or 15.5 percent, during the three months ended November 30, 2014 compared to the previous year.

Bunker fuel expenses amounted to $464 million between September and November, having been $549 million during the corresponding period in 2013.

Bunker fuel consumption fell by 25,000 tonnes, or 3.05 percent, to 794,000 tonnes, down from 819,000 tonnes the previous year. The figure was 6,000 tonnes lower than the September guidance forecast level of 800,000 tonnes.

The average fuel cost per metric tonne consumed fell by $87 per tonne, or 13.0 percent, to $584 per tonne, down from $671 per tonne during the corresponding period in 2013. The latest quarterly figure was $51 lower than the September guidance price of $635 per metric tonne.

Fuel consumption per available lower berth day (ALBD) in the fourth fiscal quarter of 2014 declined by 6.8 percent to 0.041, down from 0.044 in 2013.

Net losses on fuel derivatives were $280 million compared to a net gain of $31 million in 2013.

Please find below Carnival's fuel price and fuel consumption forecast for 2015.

Fuel price and fuel consumption forecast

First quarter 2015:

Fuel price per metric tonne: $421

Fuel consumption (metric tonnes): 780,000

Full year 2015

Fuel price per metric tonne: $436

Fuel consumption (metric tonnes): 3,170,000

Financial results

In its overall results for the fiscal year, Carnival posted a non-GAAP net income of $1.5 billion, or $1.96 diluted EPS, compared to non-GAAP net income of $1.2 billion, or $1.58 diluted EPS, for the prior year.

Full year 2014 U.S. GAAP net income was $1.2 billion, or $1.59 diluted EPS, which included unrealized losses (non-cash) on fuel derivatives of $268 million and $20 million of net charges. Full year 2013 U.S. GAAP net income was $1.1 billion, or $1.39 diluted EPS, which included net unrealized gains (non-cash) on fuel derivatives of $36 million and impairments and other charges of $190 million.

Revenues for the full year 2014 were $15.9 billion compared to $15.5 billion for the prior year. Cash from operations for the full year 2014 totaled $3.4 billion compared to $2.8 billion in 2013.

Commenting on the results, Carnival Corporation & plc President and Chief Executive Officer Arnold Donald said: "Full year earnings were significantly higher than the prior year primarily due to strong profit improvement at both our Carnival Cruise Lines and Costa Cruises brands. We enjoyed some early wins from our collaboration efforts that contributed to our improved results, particularly for onboard revenues. We worked hard to contain costs and achieved an almost five percent reduction in fuel consumption for the year as we continue to implement energy conservation measures. We also made a number of strategic decisions in fleet investments that will position us well for the future."

Commenting on the fourth quarter Donald stated: "Last quarter operating profit more than doubled due to higher ticket prices and onboard spending combined with lower costs, also exceeding previous guidance." During the quarter, the Carnival Cruise Lines brand achieved a significant increase in revenue yields despite a highly competitive environment in the Caribbean. Additionally, Costa's Asia operations achieved double-digit revenue yield improvement on a capacity increase in that region."

2015 outlook

Cumulative advanced bookings for the first three quarters of 2015 are said to be currently ahead of the prior year, and at slightly higher prices. Since September, booking volumes for the first three quarters of 2015 are running ahead of last year's levels at slightly lower prices driven by transactional currency impacts, Carnival said.

Donald noted: "The current base of business for 2015 builds confidence in our expectation of continuing yield growth with acceleration in yield improvement starting in the second quarter."

Based on current booking trends, the company forecasts full year 2015 net revenue yields, on a constant dollar basis, to be up approximately 2 percent compared to the prior year. First quarter revenue yields (constant dollars) are expected to be slightly higher than the prior year and improve during the remainder of 2015.

The company expects net cruise costs excluding fuel per ALBD, on a constant dollar basis, for full year 2015 to be up approximately 3 percent primarily due to higher dry-dock costs, advertising expenses and product enhancements. Based on current spot prices for fuel, forecasted fuel costs for the full year 2015 are expected to decrease $475 million compared to 2014, net of fuel derivatives, benefiting the company by $0.61 per share. This is forecasted to be partially offset by unfavorable movements in currency exchange rates worth $0.20 per share (includes both translational and transactional currency exchange impacts). Taking the above factors into consideration, the company forecasts full year 2015 non-GAAP diluted earnings per share to be in the range of $2.30 to $2.60, compared to 2014 non-GAAP diluted earnings of $1.96 per share.

Looking forward, Donald stated: "Based on our current 2015 guidance, we expect to achieve a 50 percent improvement in earnings compared to 2013 and are firmly on a path toward delivering double-digit returns on invested capital."

First quarter 2015 outlook

First quarter constant dollar net revenue yields are expected to be flat to up 1.0 percent compared to the prior year.

Net cruise costs excluding fuel per ALBD for the first quarter are expected to be 5.5 to 6.5 percent higher on a constant dollar basis compared to the prior year and are higher than full year guidance mostly due to the timing of expenses between quarters, Carnival said. Current currency exchange rates and fuel prices net of fuel derivatives are expected to benefit first quarter earnings by $130 million compared to the prior year, or $0.16 per share.

Based on the above factors, the company expects non-GAAP diluted earnings for the first quarter 2015 to be in the range of $0.07 to $0.11 per share, compared to 2014 non-GAAP earnings of $0.00 per share.






Related Links:

Carnival cuts CO2 emission rate by 20 percent
Carnival's annual bunker consumption could reach 3.5 million tonnes by 2016
Carnival expects to save over a billion gallons of fuel in 7 years
Carnival's fuel costs down $90 million in 9 months
Carnival bunker costs down $28 million in Q2
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