Carnival Corporation, the world's largest cruise operator which merged with P&O Princess earlier this year, reported a sharp fall in second-quarter profits yesterday but said bookings had recovered sharply after the end of the war with Iraq.
Net income for the three months to 31 May fell to $128m (£76m) from $194m in the same quarter the previous year as a combination of the Sars virus, the outbreak of viruses on some cruise ships, terrorist threats and the build-up to the war made holidaymakers stay at home.
"Clearly, the gap created by the dearth in bookings during the important wave period (for early bookings) in the first and second quarters of this year will have significant impact on our third and fourth quarter results," said Micky Arison, chief executive.
The better news was that cruise-lovers are starting to be tempted back. In the first five weeks of the third quarter, booking levels are running 54 per cent ahead of last year. However, Carnival said the bookings were being made too close to departure to have any impact on prices.
Although the company said pricing is starting to show some signs of improvement, Carnival said net revenue yields were likely to be 4-6 per cent lower in the second half, compared with 2002.
Germany remains a difficult market due to a sharp increase in capacity during the past year. In the US, Carnival said the strengthening in equity markets and improving consumer confidence offered hope for better booking figures.
Cruises to the eastern Mediterranean continue to be affected by their proximity to the war zone.
After the creation of a dual listed company with P&O Princess in April, Carnival said it was on track to achieve synergies of $100m in the first financial year. The shares closed 23p lower at 1,738p.
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