Revenues: +17.7%
EBITDA: +27.2% to €180.8 million
Net income, group share: €17 million

Paris, August 29, 2012,


"Against the backdrop of a continuing favorable market environment. BOURBON reports growth in line with the BOURBON 2015 Leadership Strategy plan. as the positive impact of the increase in average daily rates applies to an expanding fleet". says Christian Lefèvre, BOURBON's Chief Executive Officer. "With the relative slowdown in the rate of commissioning of new vessels. our focus is now more than ever on safety. operational excellence and cost control."

H1 2012 highlights

  • With a satisfactory utilization rate, the growth in revenues reflects a favorable trend in rates combined with a positive impact from the dollar, which enabled the Group to post a disproportionate increase in earnings before interest and tax (EBIT) (+27.2% and +48.2%).
  • The positive effects of BOURBON's cost-reduction strategy, especially for the Crewboats segment, are apparent in the first half of the year, offsetting the impact of the many scheduled classification dry-dock periods in Subsea Services.
  • Net income, group share recovered to €17 million, from the €21.4 million loss in the first half of 2011.

Half-year results

Revenues

Compared to the first half of 2011, revenues are up 17.7% to €568 million, with a strong 20.5% overall increase in Marine Services and Subsea Services. This growth mainly stems from the expansion of the fleet, particularly in the Shallow water Offshore segment (with 12 more vessels than in H1 2011), the rise in average daily rates and the firmer dollar exchange rate (14.5% at constant exchange rates).

Compared to the second half of 2011, revenues grew 8.1% (+3.9% at constant exchange rates), driven essentially by the Shallow water Offshore and Crewboats segments, which gained 20.1% and 10.2%, respectively. These gains primarily reflect the expansion of the fleet, the improvement in daily rates and the firmer dollar.
The sharp increase in average daily rates in Subsea Services more than offset the impact of Classification dry-dock periods

Gross operating income (EBITDA)

Compared to the first half of 2011, at €180.8 million, gross operating income (EBITDA) for the first half of 2012 was up 27.2%. This increase is clearly above the gain in revenues, since EBITDA reflects the impact of price increases combined with the strengthening of the dollar, which was however moderated somewhat by cost inflation. The improvement in EBITDA stems exclusively from Marine Services, while Subsea Services EBITDA remained stable, despite the numerous Classification dry-dock periods.

Compared to the second half of 2011, the 14.3% gain in EBITDA was substantially higher than the rise in revenues, reflecting the impact of price increases and the strengthening of the dollar. The increase is mainly due to the Shallow water Offshore vessels and Crewboats segments.

Earnings before interest and tax (EBIT)

Compared to the first half of 2011, at €63.8 million, EBIT for H1 2012 increased 48.2%. As for EBITDA above, the improvement in daily rates combined with the stronger dollar explain this growth rate, largely surpassing the gain in revenues. This robust increase is mainly due to the performance of the Deepwater Offshore vessels and Crewboats segments.
Compared to the second half of 2011, EBIT is up 51%.

Financial income / (loss)

In the first half of the year, financial loss amounted to a net charge of €32.3 million for a cost of net debt of €33.7 million.
The change in currency exchange rates generated net financial income of €2.3 million. Note that the change in foreign exchange rates in H1 2011 resulted in a €30.5 million loss and a €29.2 million gain in H2 2011.

Net income / (loss), Group share

Net income, Group share was positive at €17 million, compared to a €21.4 million loss in the same period the previous year. This marked improvement reflects the growth in EBIT and the absence of foreign exchange losses.

Marine services

Compared to the first half of 2011, Marine Services revenues increased 22.4% to €460.4 million, with growth driven by the higher rates, especially in Deepwater Offshore, the expansion of the fleet, particularly the Shallow water Offshore fleet, and the firmer dollar. At €142.6 million, H1 EBITDA rose a steep 42.7%, almost twice the rate of growth of revenues. Profitability measured by the “EBITDA to average capital employed excluding installments” ratio improved by 3.3 percentage points to 12.9%. The three segments, Deepwater Offshore, Shallow water Offshore and Crewboats all contributed to this improvement.

Revenues gained 10.5%, compared to the second half of 2011, primarily due to the higher rates in the Shallow water Offshore and Crewboats segments, combined with the favorable impact of foreign exchange rates. EBITDA increased 17.4%.

Results by segment

  • Deepwater Offshore vessels

Compared to the first half of the previous year, revenues for the period from Deepwater Offshore vessels were up 17.3% to €175 million, due primarily to improved rates and a stronger dollar, and, to a lesser extent, a higher utilization rate at 91.9%. EBITDA increased at a stronger rate than revenues to €62.8 million, a 28.6% increase.

Compared to the second half of 2011, revenues and EBITDA increased slightly (by 3.4% and 1.6%, respectively).

  • Shallow water Offshore

Compared to the first half of 2011, revenues for the period from Shallow water Offshore vessels increased 35.7% to reach €153.8 million, mainly driven by the expansion of the fleet (+12 vessels in the past 12 months), the firmer dollar and the upturn in rates. First-half EBITDA for the segment totaled €40.4 million, up 42.1%, proportionately outstripping the growth in revenues.

Compared to the second half of 2011, revenues for the period for this segment rose 20.1%, reaping the benefits of these same impacts. EBITDA increased 26.7% for the second half of the year.

  • Crewboats

Compared to the first half of 2011, revenues for the Crewboats segment reached €131.6 million, up 15.8% thanks to the improvement in rates, the stronger dollar and the expansion of the fleet (+9 vessels in the past 12 months).
Rising by a steep 73.6%, EBITDA was €39,4 million, buoyed by the increase in revenues and excellent cost control.

Compared to the second half of 2011, revenues for the period for this segment increased 10.2%, mainly due to the higher rates. EBITDA for the second half of the year rose 42.4% for the same reasons.

Subsea services

Compared to the first half of 2011, revenues posted by Subsea Services for the period rose 11.9% to €92.1 million, while EBITDA remained practically stable. As a result, the ratio of EBITDA to Revenues dipped slightly from 42% to 37.9%.
Profitability measured by the “EBITDA to average capital employed excluding installments” ratio was 15.1%.

Compared to the second half of 2011, revenues improved very slightly, by 1.9%, as the positive impact of the stronger dollar and the increase in rates was largely offset by the effect of Classification dry-dock periods. EBITDA increased 6.0% due to good cost control.

To recap, two "small" IMR vessels were transferred from Subsea Services to Marine Services, and one well-stimulation vessel was transferred from Marine Services to Subsea Services.

Other

“Other” mainly includes the business from the cement carrier Endeavor, externally chartered offshore vessels, as well as items not included in the two other Activities. The decline in revenues and EBITDA reflects the slowdown in external chartering in the Offshore activities.

Outlook

Despite the continued uncertainty surrounding global economies, investments by oil and gas sector clients continue to be backed by the price per barrel (US$113 on average for the first half of the year), while demand for offshore service vessels is predicted to increase over the next two years.

Orders for drilling rigs due to be commissioned in the next few years and the order books of offshore construction companies are set to stimulate demand for vessels.

In Shallow water Offshore, accelerating the process of replacing older vessels (deemed obsolete) on the market seems vital in order to meet the increasingly stringent risk management demands of oil and gas companies. Clients will continue to favor innovative, high-productivity vessels, which is where BOURBON’s fleet of vessels is particularly appreciated. The global Deepwater Offshore fleet continues to increase with new orders for "large" PSVs. In line with its strategy of taking into account the risk of over-capacity, BOURBON has very limited exposure to this market and concentrates on medium-sized vessels, for which demand remains strong in international markets.

BOURBON's earnings are influenced by the €/US$ exchange rate. Accordingly, BOURBON set up €/US$ hedging contracts to cover the entirety of its estimated EBITDA exposure in 2012. These dollar forward sales were made at an average exchange rate of €1 = US$1.3070.

Additional information

  • In August 2012, typhoon Haikui struck China, affecting the construction of 15 vessels in Sinopacific's shipyards in Zhejiang. The estimated delay for delivery and transfer of title to BOURBON of these vessels is five to six months.
  • The accounts for the first half of 2012 were closed by the Board of Directors on Monday, August 27, 2012.
  • The accounts for the first half of 2012 underwent a limited examination by the statutory auditors.