Offshore vessel market is bottoming out, says Bourbon
Andrew Spurrier, Europe correspondent | 3 August 2016
Bourbon’s first-half revenues dived 21% year on year to EUR599.2 million (USD670 million), although the French offshore vessel operator said some of its businesses had reached the low point in their downturns.
Bourbon, which claims to be the most resilient offshore-vessel operator, has apparently escaped the acute financial difficulties affecting its peers in Asia and Norway.
Singapore-based Swiber recently filed to go into receivership. Several Norwegian operators have announced drastic financial restructuring plans and Solstad Offshore and REM Offshore have agreed to merge.
Bourbon said its 2016 performance would reflect the full impact of the current downtrend but that some of its activities would post no further deterioration.
The subsea operations market bottomed out in the first quarter and an improvement in vessel utilisation in the second quarter is set to continue over the rest of the year, said the company.
Crew boat activities touched bottom a little later, in the second quarter, according to Bourbon. The operator now expects the segment to pick up from increased production activity on existing fields as well as reduced use of helicopters to save costs.
The group forecast that its core deep- and shallow-water vessel operation business would bottom out during the current quarter, lagging other segments due to its late cyclical nature.
Bourbon had 67 vessels, representing 27% of its fleet, ‘stacked’ at the end of June.
The group remains reluctant to talk about outright recovery, despite claiming its main businesses are at or close to lows.
Bourbon chairman Jacques de Chateauvieux, who recently returned as chief executive to steer the group through current difficult market conditions, has said only that Bourbon would be well placed to take advantage of a recovery when it arrives.
“While the world’s largest oilfield services company thinks the crude market has bottomed [a reference to a statement by Schlumberger chief executive Paal Kibsgaard], Bourbon is ready to benefit in the first place from the market recovery when it will materialise,” said De Chateauvieux.
In the meantime, the group says it is expecting a fall in full-year revenues comparable to that in the first half and a slight reduction in EBITDAR (earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs).
The group’s full half-year results are due to be announced on 8 September.
The percentages note in this article are similar to the 20-30% fall in day rates and theoretical vessel values in the U.S. Gulf. Many experts are saying that the international service vessel industry will strengthen earlier than the U.S. domestic market.