Bourbon annual revenue down 20 percent

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In an announcement on its Annual & 4th Quarter 2018 Results, Bourbon said 2018 was marked by the stabilization of activity over the last 3 quarters and adjusted 2018 revenues of €690 million still impacted by the crisis (consolidated revenue €633.9 million). Adjusted 2018 revenues were down by 20% compared to 2017, impacted by the renewal of long-term contracts at market rates. With adjusted revenues for Q4 of €175.9 million, the activity has been stable over 3 consecutive quarters, in particular that of Bourbon Marine & Logistics and Bourbon Mobility. While Bourbon Subsea Services remains severely impacted by market conditions in 2018, with revenues down by almost 40%, its activity has been steadily improving for the last 3 quarters.

  Quarter Full Year
In € millions, unless otherwise noted Q4 2018 Q3 2018 Change
Q4/Q3
Q4 2017 2018 2017 Change
2018/2017
Financial performance          
         
Adjusteda revenues 175.9 173.5 +1.3% 196.9 689.5 860.6 -19.9%
(change at constant rate) -0.2%   -13.0%
Bourbon Marine & Logistics 88.0 87.0 +1,2% 100.2 357.3 411.1 -13.1%
Bourbon Mobility 46.1 46.3 -0.5% 51.0 187.7 216.3 -13,2%
Bourbon Subsea Services 38.2 37.9 +0.8% 43.6 133.6 220.1 -39.3%
Others 3.6 2.3 +53.9% 2.1 10.9 13.1 -16.7%
       
IFRS 11 impact *** (13.7) (13.4)   (15.3) (55.6) (67.0)  
       
Consolidated revenues 162.2 160.2 +1.3% 181.6 633.9 793.6 -20.1%
           
           
Operational indicators            
       
Number of vessels (FTE)* 491.9 498.5 -1.3% 509.9 500.1 511.5 -2.2%
       
Average utilization rate (%) 51.7 51.6 -0.1 pt 53.7 52.2 53.7 -1.5 pts
       
Average daily rate ($/d) 7,989 7,854 +1.7% 8,299 7,942 8,725 -9.0%
       
* FTE: Full Time Equivalent          

 “As a sign of market improvement, we note a recovery in the number of calls for tender, leading to a stabilization of our revenues over the 3 last quarters. However, market recovery is slow. It is therefore more important than ever that we accelerate our transformation in order to bring our clients more added-value services”, declared Gaël Bodénès, Chief Executive Officer of BOURBON Corporation.

(a) Adjusted data:
The adjusted financial information is presented by Activity and by Segment based on the internal reporting system and shows internal segment information used by the principal operating decision-maker to manage and measure the performance of BOURBON (IFRS 8). Internal reporting (and thus the adjusted financial information) records the performance of operational joint ventures on which the group has joint control using the full integration method. Furthermore, internal reporting (and again the adjusted financial information) does not take into account IAS 29 (Financial Reporting in Hyperinflationary Economies), applicable for the first time in 2017 (retroactively from January 1) to an operational joint venture in Angola.

BOURBON MARINE & LOGISTICS

  Quarter Full Year
In € millions, unless otherwise noted Q4 2018 Q3 2018 Change
Q4/Q3
Q4 2017 2018 2017 Change
2018/2017
Financial performance          
         
Adjusteda revenues 88.0 87.0 +1.2% 100.2 357.3 411.1 -13.1%
Deepwater offshore vessels 53.0 52.4 +1.1% 60.0 217.7 256.9 -15.3%
Shallow water offshore vessels 35.0 34.6 +1.2% 40.2 139.6 154.2 -9.5%
         
             
Operational indicators            
         
Number of vessels (FTE)* 212.0 213.1 -0.5% 218.9 214.5 220.5 -2.7%
         
Average utilization rate (%) 50.5 51.0 -0.5 pt 51.9 51.4 49.0 +2.4 pts
Deepwater offshore vessels 61.0 60.4 +0.6 pt 61.3 62.4 62.2 +0.2 pt
Shallow water offshore vessels 43.2 44.4 -1.2 pt 45.6 44.0 40.8 +3.2 pts
       
Average daily rate ($/d) 10,177 10,128 +0.5% 10,802 10,378 11,542 -10.1%
Deepwater offshore vessels 12,701 12,705 ns 13,660 12,895 14,389 -10.4%
Shallow water offshore vessels 7,694 7,709 -0.2% 8,220 7,939 8,669 -8.4%
         
* FTE: Full Time Equivalent          

Testifying to the market stabilization, adjusted revenues for Bourbon Marine & Logistics in Q4 2018 are very slightly up at €88 million (+1.2% compared to Q3 2018).

Over the year, activity has stabilized with an average utilization rate remaining above 50%, up 2.4 points compared to 2017 and a utilization rate for the fleet in operation of 87.1% (compared to 87.4% in 2017). Rates have stabilized in both Deepwater and Shallow water offshore, with the 10% decrease mainly due to the renewals of older long-term contracts at current market rates. Overall, adjusted revenues are down by 13% compared to 2017 (-4.1% at constant rate).

Activity was dynamic in the Mediterranean/Middle East region, notably driven by new contracts in Egypt.

BOURBON MOBILITY

  Quarter Full Year
In € millions, unless otherwise noted Q4 2018 Q3 2018 Change
Q4/Q3
Q4 2017 2018 2017 Change
2018/2017
Financial performance          
         
Adjusteda revenues 46.1 46.3 -0.5% 51.0 187.7 216.3 -13.2%
       
             
Operational indicators            
       
Number of vessels (FTE)* 259.9 265.4 -2.1% 269.0 265.3 269.0 -1.4%
       
Average utilization rate (%) 52.5 51.8 +0.7 pt 55.0 53.1 56.9 -3.8 pts
       
Average daily rate ($/d) 4,239 4,285 -1.1% 4,422 4,308 4,418 -2.5%
         
* FTE: Full Time Equivalent

 

         

Adjusted revenues for Q4 2018 came out stable overall (-0.5% compared to Q3 2018), reflecting a slight increase in utilization rates (+1.5%), while daily rates are struggling to improve (-$46/day).

Over the year, adjusted revenues are down 13.2% compared to 2017, of which -5 points are due to exchange rate effects. Activity was impacted by a slower than expected reactivation of Surfers and a higher maintenance and repair activity than the previous year (notably large ” crewliner “-type long-distance transport vessels).

BOURBON SUBSEA SERVICES

  Quarter Full Year
In € millions, unless otherwise noted Q4 2018 Q3 2018 Change
Q4/Q3
Q4 2017 2018 2017 Change
2018/2017
Financial performance          
         
Adjusteda revenues 38.2 37.9 +0.8% 43.6 133.6 220.1 -39.3%
       
             
Operational indicators            
       
Number of vessels (FTE)* 20.0 20.0 22.0 20.3 22.0 -7.7%
       
Average utilization rate (%) 54.9 54.3 +0.6 pt 56.7 48.5 60.7 -12.2 pts
       
Average daily rate ($/d) 33,207 30,321 +9.5% 31,425 32,592 35,328 -7.7%
         
* FTE: Full Time Equivalent          

The 4th quarter 2018 was marked by stable adjusted revenues (+0.8%) compared to the previous quarter, with a utilization rate up very slightly (+0.6 pt), reflecting an increase in the platform maintenance activity in Nigeria and prices that have stabilized, but remain under pressure.

Overall, after a significant decline in adjusted revenues in the first quarter 2018, Bourbon Subsea Services posted growth in activity in every quarter. Despite this, adjusted revenues are down almost 40% for the year. Turnkey projects, which today represent 6% of revenues, were unable to offset the weak utilization rate combined with a decrease of over 7% in daily rates and the sale of an IMR vessel in 2018.

OTHERS

  Quarter Full Year
In € millions, unless otherwise noted Q4 2018 Q3 2018 Change
Q4/Q3
Q4 2017 2018 2017 Change
2018/2017
Financial performance          
         
Adjusteda revenues 3.6 2.3 +53.9% 2.1 10.9 13.1 -16.7%
         

Activities included are those that do not fit into either the Marine & Logistics, Mobility or Subsea Services segments. The majority of the total represents earnings from miscellaneous ship management activities.

OUTLOOK

Our oil & gas customers have regained some leeway but remain vigilant in their investments with a volatile barrel price that fell below $60 at the end of 2018. With an upwards trend, these investments appear to be subject to a switch in 2019 towards the Offshore segment rather than onshore projects, particularly American shale gas and oil.

Clients are currently continuing to focus on short-term projects with rapid return on investment. However, 2019 should see the return of numerous exploration campaigns, particularly in the Caribbean and Middle Eastern areas, and still in Africa.

MAJOR EVENTS

On January 3, 2019, BOURBON announces having renewed the general waiver with its leasers and debt holders representing the majority of the group’s debt, thus allowing it to suspend the payments of its loans and debt. This waiver allows it to stay focused on its operational priorities, while pursuing its search for all solutions capable of adapting its financing to its performance, in a secured framework. The company remains confident in its ability to find such a solution in an amicable framework.

As part of its process to seek new financing, BOURBON confirms that it is still actively looking for financial partners to ensure its development and deploy its strategic plan, #BOURBONINMOTION. At this stage, all solutions are being considered and the parameters for this new financing have not yet been determined.

A general meeting for holders of Undated Deeply Subordinated Fixed to Floating Rate Bonds took place on December 17, 2018.

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