Carnival posts record Q3 despite rising fuel costs

Friday, 20 Sep, 2005 0

Cruise giant Carnival Corporation achieved improved pricing during the summer peak to offset fuel price hikes and produce a record third quarter.

Net profits were up by $126 million to $1.15 billion on an 11% rise in revenue to $3.61 billion in the three months ending August 31.

Profits after tax in the first nine months stood at $1.90 billion against $1.56 billion for the same period in 2004.

The 79-ship group – with UK brands including P&O Cruises, Cunard, Ocean Village and Swan Hellenic – saw fuel costs rise by 36% in the quarter.

Despite this, the group’s chairman and CEO Mickey Arison predicted a 20% rise in earnings per share for the full year.

He said: “That’s quite a remarkable accomplishment considering that fuel prices increases are estimated to cost the company an additional $170 million, or $0.20 a share, in 2005.”

These costs could be $200 million higher in 2006 if fuel prices follow the current forward curve, Arison cautioned.

He said the impact of Hurricane Katrina on the US Gulf Coast would have some impact on the company’s fourth quarter results due to the cancellation of one cruise, the shortening of two others, changes in homeports for two ships and other disruption. The company has also chartered three vessels to the US government to be used in the recovery effort, as reported by TravelMole.

Despite this, recent bookings remain strong, with advance bookings for the fourth quarter “slightly ahead” of last year with average pricing above the 2004 period.

For 2006, booking levels and prices for the first half are ahead of the comparable period this year.

“Given booking trends to date and a continued strong demand for travel, we are optimistic that we will be able to achieve continued growth in revenue yields in 2006,” Arison said.

Report by Phil Davies

Phil Davies

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