19 September 2008

Carnival Corp summer profits slide

Carnival Corporation saw profits decline on increased sales during the summer peak.

The cruise giantÃ¢â¬â¢s net profit was down at $1.3 billion for the three months ending August 31 from $1.4 billion in the same quarter last year.

Like for like revenue was up to $4.8 billion against $4.3 billion.

Higher fuel prices cost the company $230 million in the quarter, an increase of 77% year on year.

Fuel costs are forecast to increase by $678 million for the full year compared to 2007.

Existing fuel supplements on cruise fares are expected to offset around a quarter of the fuel price hike for 2008.

The company estimates that with current supplements remaining in place around 43% of the cumulative increase in fuel costs since last year would be offset.

Chairman and CEO Micky Arison said forward bookings into the first half of next year had slowed but pricing is Ã¢â¬Åâœholding up well given the current difficult economic environmentÃ¢â¬~.

He added: Ã¢â¬ÅâœThe value of brand recognition and the consumer confidence they inspire is an important asset for us in uncertain economic times.Ã¢â¬~

The strengthening dollar is expected to reduce fourth quarter profits by $33 million but fuel expenses have declined by $60 million since guidance given in June.

Looking back on the summer, Arison said all CarnivalÃ¢â¬â¢s major brands performed Ã¢â¬Åâœquite wellÃ¢â¬~ with increased revenue yields.

European brands saw a 24% capacity increase Ã¢â¬Åâœalthough local currency yields were lower against strong comparisons from the prior year,Ã¢â¬~ the company said.

by Phil Davies