For 2013, Carnival Corporation expects to see a stronger North American market, while its European brands continue to be negatively impacted by deteriorating economies – more recently also in the UK and Germany (in addition to Southern Europe), company executives said on today’s earnings call.
Despite cumulative advance bookings and pricing running behind year-over-year at this point, and an increased cost picture, the earnings guidance for 2013 is from $2.20 to $2.40, compared to $1.88 for 2012 and $2.42 for 2011. (2012 was pulled down by the Concordia incident.)
Contributing to 2013 earnings will be a 5 percent reduction in fuel consumption. According to Carnival Chairman and CEO Micky Arison, the company expects a 5 percent fuel reduction in 2013 mainly due to itinerary changes.
Arison also promised new deployment announcements for Asia later in the company’s first quarter as it is opening a corporate office in Singapore.
Costa Crociere is recovering from the Concordia incident, but a full recovery will take several years, according to David Bernstein, CFO and executive vice president. While Costa has recovered occupancy levels, there is still a way to go on pricing, which is being tempered by the economic situation, he said.
Bernstein noted that 2013 will be impacted by higher costs as Costa’s occupancy has picked up, along with higher insurance costs, a U.K. officers’ pension plan payment, and investments in new market initiatives in China and Australia. Costs for the year are expected to be up 1 to 2 percent, excluding fuel.
Total ship capacity will be up 3.6 percent in 2013 – with the new AIDAstella, being delivered in March, and the Royal Princess toward the end of May.
The largest capacity increases in percentage terms are taking place in Australia and Asia and in Europe, outside of the Mediterranean.
With Costa being profitable for the first time in China in 2012, it is adding a second ship this year, doubling its capacity, in addition to Princess Cruises going into Japan, and Carnival Cruise Lines having a ship year-round in Australia. However, even with two or three more ships in Asia, the region will represent a very small portion of Carnival’s overall deployment and consequently passenger sourcing and revenue generation.
