Carnival Announces New Ships & Massive Profits
Carnival plans to spend $2 billion for four ships, with options for two more. The company has placed its orders with Fincantieri Shipyards in Italy. A 2,044-passenger, 86,000gt vessel will be delivered to Holland America Line for $450 million in the summer of 2008, with an option for a second for delivery in spring of 2010. A 3,100-passenger, 116,000gt sister to the 'Emerald Princess' will be built for Princess Cruises for $570 million and delivered in the fall of 2008. A 3,004-passenger, 112,000gt sister to the 'Costa Concordia' will be built for Costa Crociere for $583 million and delivered in the summer of 2009. The company will also begin building a series of larger ships, with the first 3,608-passenger, 130,000gt vessel to be delivered in autumn of 2009 for $673 million, with an option for a second for delivery in summer of 2010. A Carnival spokesman said that the orders does not represent the much-discussed 'Pinnacle Project', which is still pending. Carnival placed a similar $2.2 billion order with Fincantieri in September, 2004. Carnival Announces $2.3 billion in Profit: Carnival has revealed massive profits for its fiscal year, following strong earnings for its fourth quarter, despite a 50 percent hike in fuel costs and the worst Atlantic hurricane season in history. Carnival took in $353 million in net income on $2.6 billion in revenues during 4th Quarter 2005, up from $294 million in net income on $2.2 billion in revenues during 4th Quarter 2004. For the full year, Carnival's profits jumped 21 percent to $2.3 billion in net income on $11.1 billion in revenues, versus $1.9 billion in net income on $9.7 billion in revenues in 2004. Net yield, adjusted for currency, rose 6.8 percent in the fourth quarter and 6.1 percent for the year, due to higher ticket prices and onboard revenue. Costs grew 4.9 percent for the quarter, primarily due to a 50 percent increase in fuel prices. Looking forward to 2006, Carnival predicts that yields will continue to grow, but not at the pace of 2004-2005, when the industry was essentially making up yield losses dating back to 9/11. As a result, Carnival predicts yield growth of 2-4 percent on a currency-adjusted basis for 2006. At the same time, costs are predicted to grow 1-3 percent entirely as a result of increased fuel costs.