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Bourbon profits cut by two thirds in first half

Bourbon profits cut by two thirds in first half
First half profits at French offshore operator Bourbon fell by 65% in the first half to EUR10.6m ($13.9m), from EUR30.9m in the same six months last year.

The reduced profits came as revenues rose from EUR647.9m to EUR657.7m between the two periods, the fleet grew by 6% to an average of 460.1 full time vessels and the average daily charter rate rose from $11,579 per day to $12,207 per day. The 5.4% increase in average rates was partially offset by a 1.9% drop in average utilisation across the fleet to 81.5%.

Bareboat charter costs were EUR45.2m for the period as Bourbon's $1.5bn sale and leaseback deal with ICBCL continues; 43 out of the total 51 vessels already transferred to the Chinese company. Bourbon said that a 55.3% fall in EBIT to EUR40.7m was largely due to a EUR41.8m rise in bareboat charter costs year-on-year, which had not been fully offset by capital gains. Net debt at the company was reduced by EUR150.1m in the half, bringing the total debt reduction over the past year to EUR556m.

"Offshore markets during the first half of 2014 were affected by a slowdown in activity, partly due to cost reductions by oil & gas companies and delays on some projects", said Christian Lefèvre, ceo. "Bourbon showed strong improvement in cost control while taking delivery of 23 vessels during the period, bringing the total number of vessels under operation to 500 offshore supply vessels."

The company sees a positive outlook for OSVs on the demand side, with a large number of rigs under construction due to enter the fleet in the medium term. "On average, we anticipate a stable demand for offshore support vessels," it said. For the large PSV sector however, oversupply is a concern as a high number of the ships enter the fleet, although Bourbon is largely protected by its contract coverage.

The new controlling shareholder of Bourbon, the private investment company of Bourbon's chairman Jacques de Chateauvieux, Jaccar Holdings, will present its new outlook for the company in the first half of 2015.