Carnival has cruised to the top of a weak FTSE 100 after reporting a return to profit.
The world’s biggest cruise operator in terms of revenue unveiled a net profit of $49m for the first quarter, compared to a loss of $20m this time last year. The company, which includes the Carnival, Holland America and Costa cruise lines, said revenue had fallen 1.7% but it benefited from a 7% drop in operating costs, notably the 38% decline in fuel prices in the quarter from a year ago.
Chief executive Arnold Donald said advance bookings for the rest of the year were ahead of this time in 2014 and at higher prices. It also expects a $74m boost to earnings in the second quarter from lower oil prices. But he added:
The strengthening of the US dollar has hampered our full year earnings expectations, masking the 3% to 4% (constant currency) yield increase our collective brands are expecting to achieve.
Our successful initiatives to drive both ticket and onboard revenue yields have improved our financial performance and we remain on track toward our goal of achieving double digit return on invested capital in the next three to four years.
The company has suffered a number of high profile accidents in recent years and it has been rebuilding its image, including an advertising campaign built around the Super Bowl which has received 10bn hits to date. The recent delivery of the cruise ship Britannia, built in Britain and christened by the Queen, also help boost its profile.
The positive update has lifted the company’s shares by 132p to £31.56.
Meanwhile the FTSE 100 is currently down 29.09 points at 6866.24 on continuing concerns about the Middle East, Greece and the US economy.
