September 18, 2004

Carnival earnings break $1 billion barrier

Carnival Corporation & plc chairman and CEO Micky Arison indicated yesterday that he could soon be back in the newbuilding market.

"We are working very hard right now with the yards to mitigate the currency issues," Arison said, "but clearly, to get ships for 2007-2008, time's running out, so I do expect some news relatively soon."

Carnival is also continuing to work on a "very large prototype called the Pinnacle Project" for Carnival Cruise Lines brand. This ship would be delivered no earlier than the end of 2008 and probably in early 2009.

Last year Carnival disclosed it was working on a project involving a cruiseship of 170,000-180,000 gt, with a capacity of 3,600-4,000 passengers.

The hints on future newbuilding came after Carnival Corporation & plc reported record net income of $1.03 billion, or $1.23 diluted EPS, on revenues of $3.2 billion for its third quarter ended August 31, 2004 compared to net income of $734 million, or $0.90 diluted EPS, on revenues of $2.5 billion for the same quarter in 2003.

Net income for the nine months ended August 31, 2004 was also a record at $1.56 billion, or $1.90 diluted EPS, on revenues of $7.5 billion, compared to pro forma net income of $1.01 billion, or $1.25 diluted EPS, on pro forma revenues of $5.8 billion for the same period in 2003. Reported net income and diluted EPS for the nine months ended August 31, 2003 were $989 million and $1.42, respectively.

Net revenue yields (net revenue per available lower berth day) for the third quarter of 2004 increased 10.9 percent compared to net revenue yields in the prior year, primarily due to higher cruise ticket prices and on-board revenue and, to a lesser extent, the weak U.S. dollar relative to the euro and sterling. Net revenue yields as measured on a local currency basis ("constant dollar basis") increased 8.3 percent over the same period last year. Gross revenue yields increased 10.1 percent.

Net cruise costs per available lower berth day ("ALBD") for the third quarter of 2004 were up 3.2 percent compared to costs for the same period last year, primarily due to the impact of the weak dollar and higher fuel costs. On a constant dollar basis, net cruise costs per ALBD increased 0.8 percent from the same period last year largely due to higher fuel costs. Gross cruise costs per ALBD increased 4.4 percent compared to the prior year.

Commenting on the third quarter results, Carnival Corporation & plc chairman and CEO Micky Arison said that he continues to be very pleased with the company's performance. "This record-breaking quarter is a testament to the success of the merger with P&O Princess Cruises last year. It is our best quarter ever and the first time we have earned more than a billion dollars in a single quarter. All of our major cruise brands in North America and Europe are performing well, building confidence in our outlook for the combined group for 2005," Arison added.

Looking forward, Arison said that he is equally pleased with the outlook for the full year 2004. "We are on track to achieve a record increase in revenue yields this year of approximately 9 percent, while absorbing an extraordinarily high 17 percent capacity increase," Arison added.

The company has one ship scheduled to enter service during the fourth quarter of 2004. Costa Cruises' 2,702-passenger Costa Magica, which will be one of the largest European passenger vessels, will operate a series of European cruises beginning November 10, 2004.


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