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Soaring fuel costs a concern for Royal Caribbean
High fuel costs remain a “major focus” for Royal Caribbean Cruises despite recording increased first quarter profits.
The US parent company of Royal Caribbean International and Celebrity Cruises saw net profits for the first three months of the year rise to $135.3 million against $95.8 million the same period last year.
Higher cruise prices, a 3.3% increase in capacity and improved occupancy and onboard revenues helped push up revenues by 10% to $1.2 billion year-on-year.
Chairman and Chief executive Richard Fain said: “All key elements of the business performed very well, but the high cost of fuel is a major focus.”
The company said that ‘at the pump’ fuel prices had exceeded forecasts and were running 20% higher than the 2004 yearly average, a rise of nine percentage points since the end of the first quarter. If these levels are maintained it will cost the company an extra $26 million in addition to $23 million already estimated.
The cancellation of a 10-night Hawaii cruise due to engine problems with Celebrity ship Infinity is expected to reduce earnings per share by between three and four cents, divided between the first two quarters of the company’s financial year.
Report by Phil Davies
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