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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Carnival posts record Q3 despite 41% jump in bunker costs

Fuel expenses rose to $434m as average bunker price climbed $153 to $531 per tonne.



The Carnival Valor docked at Nassau, Bahamas. Image credit: Charles Pluta Flickr CC BY-SA 2.0


Updated on 28 Sep 2018 00:51 GMT

US cruise operator Carnival Corporation reports that it recorded a 41.4 percent jump in bunker costs, year-on-year (YoY), during the company's third fiscal quarter (Q3) of 2018, which runs between June 1 and August 31.

Bunker fuel expenses in Q3 amounted to $434m (up $127m, or 41.4 percent), having been $307m during the corresponding period the previous year.

The company paid an average of $531 per metric tonne (pmt) over the period, compared with $378 pmt in Q3 2017 - representing a rise of $153, or 40.5 percent.

Bunker fuel consumption was 818,000 mt - 4,000 mt higher than the same quarter last year.

Fuel consumption per thousand available lower berth days (ALBDs) was down to 38.1 mt from 38.5 mt in 2017.

Nine-month figures

For the first nine months of the fiscal year (December 1 to August 31), Carnival saw bunker costs increase by $252m, or 27.6 percent, to $1,166m, up from last year's figure of $914m.

The average price paid for fuel jumped $103, or 27.8 percent, to $474 pmt, up from $371 pmt during the prior-year period.

The cruise specialist's vessels burned 2,458,000 mt, compared with 2,463,000 tonnes in 2017.

Fuel consumption per thousand available lower berth days (ALBDs) was 39.3 mt, down from 40.0 mt the year before.

2018 forecast

Below is Carnival's fuel price and fuel consumption forecast for 2018.

Fourth-quarter 2018 forecast

Fuel price pmt: $529
Fuel consumption (mt): 845,000

Full-year 2018 forecast

Fuel price pmt: $488
Fuel consumption (mt): 3,305,000

Key financial results

In its key results for Q3 2018, Carnival posted an increase in net income of $378m, or 28.4 percent, to $1,707m - the best Q3 figure in its history.

Q3 revenue amounted to $5,836m, which was $321m, or 5.8 percent, higher than the $5,515m achieved during the corresponding period in 2017.

Operating costs, meanwhile, dipped $80m, or 1.9 percent, to $4,042m.

Commenting on the results, president and chief executive officer Arnold Donald said: "Strong execution delivered the highest quarterly performance in our company's history, overcoming fuel and currency headwinds. At the same time, our strong cash flow and balance sheet enabled us to accelerate our opportunistic share repurchase program, investing almost $750 million in Carnival stock since the beginning of the third quarter, bringing the total investment to $4.4 billion in just three years, and leading to the second replenishment of our $1.0 billion repurchase program this year alone."

On the company's outlook for 2018, Donald remarked: "We are on track to achieve double digit return on invested capital in 2018 as we deliver upon our strategy to create demand in excess of measured capacity growth, all while containing costs and leveraging our industry leading scale. Going forward, we remain on a path toward continued growth in earnings and returns, driven to a greater degree by capacity increases as we add more efficient ships, replacing less efficient capacity. We believe the plans we have put in place will maximize returns to shareholders over time as we continue to execute in an industry that is both under-penetrated and capacity constrained."






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