Gross operating income (EBITDA) steady at 168.5 million euros
Net income group share totals 41 million euros in the first half of 2010
Paris, August 31th 2010
« BOURBON’s activity is focused on offshore oil and gas marine services, and we have expanded our fleet rapidly, taking delivery of one supply vessel every 12 days. The offshore oil market is at its lowest and average daily rates have been down since the end of 2008, remaining low during the first half of 2010 », says Jacques de Chateauvieux, Chairman & Chief Executive Officer of BOURBON. « Thanks to its innovative and high productivity fleet enabling customers’ costs to be reduced, BOURBON has maintained a satisfactory utilization rate for its vessels in the first semester 2010 of nearly 80%. In this unfavorable market, the fall in gross operating income is due mainly to sluggish revenue increases and to the growth of operating costs due to the large number of vessels added to the fleet. Furthermore, because of the increase in the depreciation and impairment charge for the 16 bulk carriers, the sales of which are intended to finance the « BOURBON 2015 Leadership Strategy, » operating income is down sharply. Judging by the success of the BOURBON fleet with customers, BOURBON will be among the first to benefit from the recovery of the offshore market, which is already perceptible and which is expected to pick up throughout 2011. Thus we are therefore confident that the goals of the new BOURBON 2015 plan will be easily met. »
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BOURBON activity is focused on Marine Services to the offshore industry, and we have been growing very fast during the last years, taking delivery of more than one vessel every 12 days.
In this down cycle of the offshore market, the levels of dayrates have decreased since the end of 2008 and stayed low during the first semester of 2010.
In the context of an unfavorable market, the growth of the revenues generated by the vessels of BOURBON within its Offshore Division has slowed down.
At the same time, the expenses for operations went up due to the increase of the number of vessels in operation growing from 326 end of June 2009, to 357 at year end, to reach 388 end of June 2010. The result of this has been a reduction of EBITDA generation of 30 million euros compared to the previous semester, to reach 125.7 million euros for the offshore Division.
Given the increase of depreciation charges that followed the fleet growth, the operational result is down by 54% to 40.9 million euros for the Offshore Division.
During this semester, the activity of our Bulk Division produced good financial results, in line with improving freight markets. Moreover capital gain on disposal of vessels in January contributed to further increased our EBITDA generation.
However, with the announced disposal of 16 bulk carriers due to take place during the second semester – and this is a key element of the financing of BOURBON 2015 Leadership Strategy – BOURBON booked an impairment cost of 34.3 million euros. Therefore the net negative impact of the bulk carriers’ disposal has been nearly 13 million euros.
For BOURBON over all, the revenues of the first half of 2010 reached 490.4 million euros, and increase of 6% compared to the previous semester. EBITDA was down by 18 million euros at 146.6 millions. BOURBON’s operational result was down to 39.4 million euros, a decrease of 57% compared to the second half of last year. The net profit group share, stands at 41 millions, compared to 73.1 million for the previous six months.
During the first half, total investments reached 341 million euros, which is in line with our Horizon 2012 target. Among others, the Bourbon Liberty vessels confirm their successes in the renewal of the ageing and obsolete continental offshore fleet.
Due to prevailing unfavorable market conditions and to the bulk fleet impairment costs, the financial results of BOURBON for the first six months have been significantly affected.
However, we are confident in delivering improved performances in the terms to come, thanks to the quality of our offshore young and modern fleet, the upward trends of our utilization rates, already felt but to further improve in 2010 and even more so throughout 2011, the trust of our customers and to our fully committed BOURBON personnel.