Fri 23 Jun 2017, 00:07 GMT

Carnival posts 58.2% jump in Q2 bunker costs


Cruise operator records $379m Q2 net income to 'more than offset the substantial drag from fuel'.



US cruise operator Carnival Corporation & plc (Carnival) has recorded a jump in bunker costs in its financial results for the second fiscal quarter of 2017, which runs between March 1 and May 31.

Bunker fuel expenses rose from last year's figure of $196 million to $310 million, representing an increase of $114 million, or 58.2 percent.

For the first six months of the company's fiscal year (between the start of December and end of May), Carnival saw bunker costs increase $224 million, or 58.5 percent, to $607 million, up from last year's figure of $383 million.

Bunker fuel consumption for the second quarter was 830,000 tonnes - 2.7 percent higher than the 808,000-tonne amount consumed during the prior-year period.

The ferry operator's vessels burned 1,649,000 tonnes during the first half of the year (H1), compared to 1,623,000 tonnes in 2016.

The company paid an average of $374 per metric tonne (pmt) over the three-month period between March and May, compared to $243 pmt during the same quarter in 2016 - representing a rise of $131 pmt, or 53.9 percent.

Fuel consumption per available lower berth day (ALBD) was down to 40.7 from 41.0 in the second quarter, while in H1 the figure was 40.8 compared to 41.6 last year.

2017 forecast

Below is Carnival's fuel price and fuel consumption forecast for 2017.

Third-quarter 2017 forecast

Fuel price per metric tonne: $372

Fuel consumption (metric tonnes): 815,000

Full-year 2017 forecast

Fuel price per metric tonne: $367

Fuel consumption (metric tonnes): 3,300,000

Financial results

In its overall results for the second fiscal quarter of 2017, Carnival posted a net income of $379 million - down from last year's figure of $605 million. H1 net income dipped $17 million to $730 million.

Revenue for the second quarter of 2017 was $3,945 million - $240 million higher than the $3,705 million achieved in 2016. H1 revenue was marginally lower at $7,736 million, compared to last year's $7,357 million result.

Commenting on the results, Arnold Donald, Carnival Corporation & plc President and Chief Executive Officer, said: "Strong execution drove significant operational improvements, which more than offset the substantial drag from fuel and currency, leading to another second quarter adjusted earnings record."

Third-quarter outlook

Third quarter constant currency net revenue yields are expected to be up approximately 4 percent compared to the prior year. Net cruise costs excluding fuel per ALBD in constant currency for the third quarter of 2017 are expected to be in line with the prior year.

Changes in fuel prices (including realized fuel derivatives) and currency exchange rates compared to the prior year are expected to decrease earnings by $0.05 per share.

Based on the above factors, the company expects adjusted earnings per share for the third quarter 2017 to be in the range of $2.16 to $2.20 versus 2016 adjusted earnings per share of $1.92.

Future outlook

Cumulative bookings for the next three quarters are said to be higher at prices that are well ahead of the prior year.

The company expects full-year 2017 net revenue yields in constant currency to be up approximately 3.5 percent compared to the prior year - better than the March guidance of up approximately 3 percent. Also, full-year net cruise costs excluding fuel per ALBD in constant currency are expected to be up approximately 1.5 percent compared to the March guidance of up approximately 1 percent.

Changes in fuel prices (including realized fuel derivatives) and currency exchange rates compared to the prior year are expected to decrease earnings by $0.35 per share.

Taking the above factors into consideration, the company expects full year 2017 adjusted earnings per share to be in the range of $3.60 to $3.70 compared to the March guidance of $3.50 to $3.70 and 2016 adjusted earnings per share of $3.45.


Atticus vessel. Global Fuel Supply acquires first bunker tanker  

Company transitions from chartering vessels to ship ownership with asset to be renamed MV Blue Alliance.

ABB Generations 2025 publication on smartphone. ABB publishes 2025 maritime insights on decarbonisation and digitalization  

Technology firm compiles annual articles exploring energy efficiency, automation, and alternative fuels for the shipping industry.

ClassNK AiP handover ceremony for bulk carrier design. ClassNK grants approval for multi-fuel ready bulk carrier design by Oshima Shipbuilding  

Vessel design accommodates future conversion to ammonia, methanol, or LNG with carbon capture capability.

The Arctic and black carbon graphic. Four countries propose Arctic fuel measure to cut black carbon from shipping  

Proposal to IMO's PPR 13 meeting aims to establish fuel regulations under MARPOL Annex VI.

T&E chart 1. Spain, Norway and Denmark lead Europe's green shipping fuel production, study finds  

Regulatory uncertainty prevents most e-fuel projects from progressing beyond the planning stage, says analysis.

Charles Simon Edwin, Dan-Bunkering. Dan-Bunkering appoints Charles Simon Edwin as operations and compliance manager in Singapore  

Edwin transitions from sourcing role, bringing experience from physical supply operations and bunker trading.

Hamburg Express vessel. Hapag-Lloyd wins ZEMBA's second tender for e-methanol deployment  

Container line to deploy e-methanol on trans-oceanic route from 2027, abating 120,000 tonnes CO₂e.

Nuclear-powered multi-role icebreaker design render. RINA grants approval for Chinese nuclear-powered Arctic icebreaker design  

CSSC's multi-role vessel combines cargo transport and polar tourism with molten salt reactor propulsion.

Glander International Bunkering logo. Glander International Bunkering seeks two bunker traders for Singapore office  

Firm recruiting traders with 3-5 years of experience to join team in key Asian hub.

Hiring concept with puzzle pieces. Malik Supply seeks bunker trader for Fredericia office  

Danish company advertises role focusing on client portfolio development and energy product trading.