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Carnival, operator of the world’s largest cruise ship fleet, is “catching up” after the bookings slowdown following January’s Costa Concordia disaster, according to its chief executive, but still expects net yields to be down on last year.
Booking volumes for brands other than Costa, the brand whose ship capsized in the accident, were up 8 per cent over the previous year in the last seven weeks, according to Carnival. Volumes at Costa were up 25 per cent over the previous year.
However, the company acknowledged that the revival in bookings had come partly as a result of reductions in ticket prices and that net revenue yields – a measure of the revenue earned for each berth – would be 3 to 4 per cent down.
Carnival nevertheless increased its guidance for earnings per share for the full year to $1.80-$1.90, compared with $1.40-$1.70 in March. Carnival gives all such figures on a “non-GAAP basis,” excluding from the figures some of the technical gains and losses mandated under the US’s generally accepted accounting principles.
“The increase in booking volumes indicates that a progressive recovery is well under way and we are catching up following the slowdown in bookings during wave season, our peak booking period,” said Micky Arison, chief executive.
“The attractive pricing we have in the marketplace is clearly stimulating demand, especially for the Costa brand.”
Bookings at the Costa brand fell by 80 to 90 per cent in the immediate aftermath of the capsizing of the Costa Concordia, which killed 32 people on January 13 after the vessel hit rocks off the Italian coast. Even at the company’s other brands, bookings were down in the “high single-digits” as recently as March.
However, the company has insisted throughout that the bookings downturn was likely to be brief.
Carnival’s non-GAAP net income for the second quarter was $159m or $0.20 per share for the second quarter, against $206m or $0.26 per share for the second quarter of 2011. Revenue fell 2.8 per cent to $3.5bn.
The expected fall in net yields would be partially offset, the company said, by greater-than-expected cost savings. Fuel costs aside, it expected costs per available lower berth day – a standard measure of capacity – to be down slightly on 2011.
Fuel costs have not turned out to be as high as anticipated. The cost savings and lower-than-expected fuel price would together add $0.30 to full-year earnings per share, Carnival said.
Carnival’s shares fell 1.2 per cent in London to £22.40. The company is listed in both London and New York.