Carnival's (CCL) full-year results brought little respite investors in the world’s largest cruise liner operator. In fact, cumulative advance bookings for 2014 are down from the previous year and at prices in line with the prior year's levels. Accordingly, net revenue yields for the coming year on a constant currency basis are expected to be lower, while full-year adjusted EPS for 2014 is expected to range between 140¢ and 180¢, compared to 158¢ for 2013.
In fact, the cruise operator expects a first-quarter 2014 loss per share of between 7¢-11¢ (4.3p-6.7p), compared with positive EPS of 9¢ in 2013's. Management still struck an upbeat tone, though, and stressed that booking volumes have gained momentum moving into the New Year. Revenue yields are expected to turn positive in the second half of 2014, supported by a number of strategic initiatives, including a new advertising campaign and a number of road shows. That comes at a price, however, and fourth-quarter net cruise costs, excluding fuel (on a per available lower berth day basis), rose 6.5 per cent, which is well ahead of September's guidance of a 3.5-4.5 per cent increase. Moreover, this trend is expected to continue, with costs forecast to rise in the first quarter by 4.5-5.5 per cent; again reflecting higher advertising costs.
For the year as a whole, net passenger ticket revenue fell from $9.37bn to $9.3bn. Although this was offset by an increase in revenue generated onboard, through such sources as customer spending, from $2.96bn to $3.05bn - which left net cruise revenue broadly flat at $12.3bn. Fuel costs fell from $2.38bn to $2.21bn, which reflects more efficient ships, and fuel consumption fell 5 per cent per unit. More worryingly, however, net cruise costs per available lower berth day rose 4.6 per cent year-on-year to $95.91, leaving overall net cruise costs having risen from $124.8bn at $125.7bn.
Broker Numis Securities has maintained forecasts for 2014 and expects adjusted pre-tax profit of $1.37bn, giving EPS of 174¢ (from $1.07bn/128¢ in 2013).
| CARNIVAL CORPORATION (CCL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,402p | MARKET VALUE: | £5.18bn | |
| TOUCH: | 2,402-2,404p | 12-MONTH HIGH: | 2,638p | LOW: 2,017p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 1,859¢ | NET DEBT: | 37% | |
| Year to 30 Nov | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 13.5 | 1.81 | 227 | nil |
| 2010 | 14.5 | 1.98 | 251 | 40.0 |
| 2011 | 15.8 | 1.91 | 243 | 100 |
| 2012 | 15.4 | 1.30 | 167 | 100† |
| 2013 | 15.5 | 1.07 | 139 | 100* |
| % change | +0 | -18 | -17 | - |
†Excludes 50¢ special dividend *Paid on 13 December £1=$1.64 | ||||
