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Royal Caribbean has announced that the recent rise in bunker fuel prices looks set to have a negative effect on full year earnings in 2009. The world's second largest cruise operator said total fuel expenses for the year could be 12 cents per share higher at today's oil prices, which have risen significantly since the company provided its last forecast towards the end of April.

Over the past two months the Global Bunker Index (AGBP), Bunker Index's average global bunker price has risen by 29.5 percent from $379.00 per tonne on April 29th to yesterday's price of $490.65.

Meanwhile, on the New York Mercantile Exchange (NYMEX), WTI Crude has risen by 39.8 percent from $51.12 per barrel on April 30th to $71.49 per barrel at the close of trading yesterday.

Miami-based Royal Caribbean said the impact of the surge in the price of crude had been partly blunted by hedging strategies.

The company added that the flu virus would hurt 2009 earnings by about 22 cents per share and other second-quarter income will be 10 cents per share lower than expected owing to foreign currency adjustments and ineffective hedging.

At the start of the year, Royal Caribbean said bunker fuel expenses of $36.1 million for the fourth quarter of 2008 were higher than expected, as net income plunged 98 percent to $1.5 million.

As a result, the cruise operator calculated in its full year 2009 guidance that fuel expenses would be around $580 million. The figure was $55 million, or $0.26 per share, lower than its previous calculation.

The company said it was 58 percent hedged for the first quarter of 2009 and 47 percent hedged for the full year.

Please find below a table of Royal Caribbean's start of the year forecast for 2009.

	First Quarter 2009	Full Year 2009
Fuel Consumption	300,000 mt	1,265,000 mt
Fuel Expenses	$165 Million	$580 Million
Percent Hedged	58%	47%
Impact of $10 Change in WTI	$8 Million	$46 Million