The boss of Carnival Corporation has pledged to work with agents to rebuild trust, particularly in main brand Carnival Cruise Lines following problems across a series of ships.
Micky Arison, who is relinquishing the dual role of chief executive and chairman to remain chairman only, said: “The level of quality, variety and innovation available throughout our fleet has never been greater and our guests are reaping the benefits of truly exceptional vacation values.
“We are working to more broadly communicate that message through stepped up consumer and trade marketing efforts, as well as strengthened engagement of our travel agent partners. We believe these initiatives, combined with slower supply growth, will lead to increased yields.”
He was speaking as the world’s largest cruise conglomerate revealed second quarter profits of $41 million for the three months ending May 31 against $14 million the same period last year on almost identical revenues of $3.5 billion.
Net cruise costs for the quarter rose by almost 9% excluding fuel, mainly due to the timing of dry-dock expenses, vessel repair costs and non-recurring items which benefited the previous year, Carnival said.
Cumulative advance bookings for the remainder of 2013 were behind last year at prices below 2012 levels, the company admitted.
However, bookings across the group’s various brands since the end of March for the next three quarters, excluding Carnival Cruise Lines, are running higher than the prior year at higher prices.
But booking volumes for Carnival Cruise Lines – which has suffered a string of technical problems – are running behind the prior year at lower prices.
Carnival Cruise Lines completed $115 million in upgrades and repairs to Carnival Triumph following an engine room fire which left the ship stranded in the Gulf of Mexico earlier this year. The ship re-entered service in Galveston, Texas, last week.
Markets responded positively to the move to name a new chief executive with shares in the UK rising by 5.3% as the second-quarter profit beat analyst forecasts.
“We welcome both the Q2 results and the management change,” Investec analyst James Hollins wrote in a research note, keeping a “buy” rating on the shares.
Arison, who is handing the chief executive role over to Arnold Donald next month, said: “Our 90,000 global team members are dedicated to delivering an outstanding vacation experience to 10 million guests each year.”
He added: “In addition, we remain focused on reducing our fuel dependence. By year end, we will achieve a 23% cumulative reduction in fuel consumption since 2005 and expect our research and development efforts in fuel saving technologies to continue to bear fruit.
“We have strengthened our management teams in maritime and technical ship operations and product delivery, as well as marketing and communications. We expect the combination of these efforts will drive improved return on invested capital over time.”
Hollins, quoted by the Guardian, added: “Carnival has been crying out for governance changes and we welcome the role split.
“Donald looks a strong appointment, having had extensive experience across Merisant (sweeteners) and Monsanto (agricultural/consumer goods) and having served on the Carnival board for 12 years.
“Mr Arison will, we firmly assume, continue to play a key role in group development, but we welcome both the second-quarter results and the management change.”
Panmure Gordon analyst Karl Burns said: “The management have been there a long time and there has not been much impetus to change the company and adapt to a different economic and trading environment.
“Now there may be changes in the business model, and there may be a feeling someone else can take it into the 21st century.”
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