Tue 19 Jun 2012, 13:40 GMT

'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.


Person signing a document. Venture Energy signs green methanol supply deal with Shenji Energy  

Hong Kong-based firm to purchase ISCC EU-certified biomass-derived methanol for shipping clients.

Steel cutting ceremony of vessel with builder's hull no. CHB2060. Changhong International begins construction on second 11,400-teu LNG dual-fuel container ship  

Chinese shipbuilder starts work on vessel CHB2060, second of 18-ship series for Oceanroutes.

Keel-laying ceremony of Celsius. Keel laid for LNG bunkering vessel Celsius  

Turkish shipbuilder begins construction of dual-fuel bunkering vessel for Sirius Shipping and Gasum.

Marine ISTA alongside MSC Apollo vessel. Vitol’s Marine ISTA completes record 4,900 mt bunkering operation at Karachi Port  

Operation marks largest fuel supply at Pakistani port, highlighting potential for regional bunkering hub development.

Aurora Botnia vessel. Gasum and Wasaline extend bio-LNG supply agreement to 2027  

Nordic energy company renews fuel supply contract with Finnish-Swedish ferry operator through 2027.

Luminara vessel truck-to-ship bunkering. MOL Techno-Trade completes Japan’s first truck-to-ship LNG bunkering for foreign cruise vessel  

Ritz-Carlton cruise ship Luminara refuelled at Nagasaki Port using truck-to-ship method on 3 April.

NKT Eleonora vessel cable-laying. Methanol-ready cable-laying vessel hull launched in Romania  

Shipbuilder floats hull of dual-fuel vessel designed for offshore renewable energy cable operations.

Dr Prapisala Thepsithar, GCMD. GCMD biofuels lead receives Singapore standardisation award  

Dr Prapisala Thepsithar recognised for contributions to marine biofuel specification development.

Marine Energy Wales (MEW) Conference 2026 graphic. Certas Energy to attend Marine Energy Wales conference in April  

Marine fuel supplier to discuss sector solutions at UK marine renewable energy conference.

Dinamo IV vessel. Sanmar completes sea trials for 14th all-electric tugboat  

Turkish shipyard marks half-century in business with latest battery-powered vessel from ElectRA series.