The impact of the oil market cycle reaching its bottom is felt in BOURBON 1st Half 2016 adjusted revenues of €599.2 million, a 21.0% decline year on year and 11.7% reduction compared to 2nd half 2015 (both at current rates)
BOURBON is the most resilient OSV company in the market and has been impacted, however less and later, by the deep reduction in the level of activity of the oil companies following the sharp and sudden reduction of the oil price. Therefore the performance during 2016 is and will reflect the full impact of the down cycle, as illustrated by the quarter on quarter reduction of BOURBON adjusted revenues.
The evaluation of performances segment by segment shows that:
- The bottom of the market in the Subsea segment was reached in Q1 2016, and it is anticipated that the improvement in utilization rates in the second quarter will continue in the quarters to come
- The bottom of the market has been in Q2 2016 for the Crew boat segment; reduced helicopter activity for cost savings purposes and the increase of activity in production of existing fields are expected to improve the use of crew boats going forward
- In the segments Deep and Shallow water, BOURBON anticipates the bottom of the market in Q3 2016, due to the late cyclical nature of this business.
With average utilization rates that for several years remained around 8 to 12 points above most of its competitors, BOURBON strongly benefits from the preference of customers for its performances in safety, reliability and positive impacts on customers’ own costs. BOURBON also has a specific advantage in its access to markets through long established local partnerships and from the diversification of its revenues among the four different segments of the market.
“More than ever, BOURBON is focusing on what the teams control: safety, reliability, cost control and improved efficiency to the customers benefit”, says Jacques de Chateauvieux, Chairman and Chief Executive Officer of BOURBON Corporation. “While the world’s largest oil field services company thinks the crude oil market has bottomed, BOURBON is ready to benefit in the first place from the market recovery when it will materialize”.
BOURBON anticipates the low point of adjusted revenues in Q3 2016, with a possible improvement at the end of 2016.
BOURBON has continued its cash preservation strategy with proactive stacking of vessels whenever appropriate. At the end of June 2016, 67 supply vessels were stacked, representing 27% of the supply fleet. Looking forward to full year 2016 adjusted revenues, BOURBON now anticipates a full year adjusted revenue reduction in the order of magnitude experienced year on year during the first semester and a slight decrease in adjusted EBITDAR/revenues margin.
For more information, please read the full press release below.