Bourbon posts earnings for 1st Half 2008
Bourbon performed extremely well in the first half of the year. The Offshore Division was up, the Bulk Division was highly profitable and the investment program proceeded as planned. Gross operating income (EBITDA) remains high on a comparable basis despite a 15% depreciation of the dollar. Overall, BOURBON posted an excellent return on capital employed of 17.3% (excluding installments on vessels under construction) which reflects the optimization of vessel acquisition prices. explained Jacques de Chateauvieux, Chairman and Chief Executive Officer of BOURBON.
In the first half of 2008 the Offshore Division experienced strong organic growth, particularly in the "Subsea Services" activity, which accounts for 20% of the total for the Division. The Bulk Division posted an exceptional performance in a market that remains highly buoyant.
Revenues rose by 31% at constant exchange rate to 433.6 million euros, +16.9% at current exchange rate. Gross operating income (EBITDA) amounted to 138.1 million euros, in line with the same period in 2007 despite a depreciation of 15% of the US dollar. This includes 6.3 million euros in capital gains from vessel disposals compared with 11.7 million euros in the first half of 2007.
Operating income amounted to 90.4 million euros compared with 93.7 million euros in the first half of 2007.
Net income (group share) amounted to 78.2 million euros, compared with 99.3 million euros in the first half of 2007. On that date, net income included a capital gain of 21 million euros from the disposal of part of the sugar activity in Vietnam.
The ratio of "EBITDA to average capital employed excluding installments” amounted to 17.3%, very close to the objective of 18% expected for the year 2012.
Taking into account the 765 million euros in installments on vessels on order and the 250 million euros in future asset disposals, BOURBON had a net operating debt of 175 million euros as of June 30, 2008, emphasizing the group’s sound position. Hence investments are funded, the financial risks associated with current business are low, and BOURBON is generating high EBITDA on a recurring basis.
The Offshore Division posted revenues of 285 million euros, up 23.1% over the first half of 2007 (36.1% at constant exchange rate).
This growth was driven mainly by sustained organic growth in a buoyant market, particularly in Africa and Asia; the strong increase in external charters and the build-up of the "Subsea Services" activity.
Starting in 2009, results will be broken down by "Marine Services" and "Subsea Services" activities and will meet the new IFRS 8 standard.
Gross operating income before capital gains from vessel sales was stable at 94 million euros. The capital gain from vessel sales totaled 6.3 million euros compared with 11.7 million euros for the first half of 2007.
During this half year, BOURBON complied with the delivery schedule set out in the Horizon 2012 strategy, with the delivery and commissioning of 10 supply vessels, including 1 dedicated to IMR (Inspection, Maintenance and Repair).
The margin rate (EBITDA before capital gains on revenues) amounted to 33%, down by 7.4 points from the first half of 2007 owing to the following:
The 15% decline in the average price of the dollar,
The nearly threefold increase in revenues with external chartered vessels, which generate less profit,
The increase in personnel and maintenance costs, as well as current expenditure designed to guarantee future growth.
Operating income amounted to 52.8 million euros, down 21.5% from the first half of 2007, reflecting increased depreciation figures corresponding to the build-up of the fleet.
BULK DIVISION
The Bulk Division posted revenues of 133.4 million euros in the first half of 2008, up 13.6% at current exchange rate and 30.8% at constant exchange rate compared with the same period in 2007. This activity reaped the benefits of a market that remained extremely buoyant, with Baltic Supramax Index rates of USD 55,292/d compared with 36,450 in the first half of 2007 and 58,603 in the second half of 2007.
Gross operating income amounted to 38.8 million euros, up 30.1% over the first half of 2007.
Operating income totaled 37.1 million euros, up 38.5% over 2007.
OUTLOOK
BOURBON’s activity in the second half will continue in line with the Horizon 2012 plan.
The Offshore Division will be boosted by the commissioning of 32 new vessels and by the renewal of contracts in a still buoyant offshore market.
The Bulk Division’s results will include a $40.6 million capital gain following the July sale of the Supramax Fructidor bulk carrier and the Division will take delivery of two new vessels in January 2009. BSI rates are expected to remain at a high level, albeit lower than levels in the first half.
The disposal of the shares held in the Rigdon companies in early July will yield a capital gain of 58.2 million euros and will have a positive effect of some 170 million euros on BOURBON’s indebtedness.
Finally, BOURBON’s financial results will continue to be influenced by the euro-dollar exchange rate.
In the first half of 2008 the Offshore Division experienced strong organic growth, particularly in the "Subsea Services" activity, which accounts for 20% of the total for the Division. The Bulk Division posted an exceptional performance in a market that remains highly buoyant.
Revenues rose by 31% at constant exchange rate to 433.6 million euros, +16.9% at current exchange rate. Gross operating income (EBITDA) amounted to 138.1 million euros, in line with the same period in 2007 despite a depreciation of 15% of the US dollar. This includes 6.3 million euros in capital gains from vessel disposals compared with 11.7 million euros in the first half of 2007.
Operating income amounted to 90.4 million euros compared with 93.7 million euros in the first half of 2007.
Net income (group share) amounted to 78.2 million euros, compared with 99.3 million euros in the first half of 2007. On that date, net income included a capital gain of 21 million euros from the disposal of part of the sugar activity in Vietnam.
The ratio of "EBITDA to average capital employed excluding installments” amounted to 17.3%, very close to the objective of 18% expected for the year 2012.
Taking into account the 765 million euros in installments on vessels on order and the 250 million euros in future asset disposals, BOURBON had a net operating debt of 175 million euros as of June 30, 2008, emphasizing the group’s sound position. Hence investments are funded, the financial risks associated with current business are low, and BOURBON is generating high EBITDA on a recurring basis.
The Offshore Division posted revenues of 285 million euros, up 23.1% over the first half of 2007 (36.1% at constant exchange rate).
This growth was driven mainly by sustained organic growth in a buoyant market, particularly in Africa and Asia; the strong increase in external charters and the build-up of the "Subsea Services" activity.
Starting in 2009, results will be broken down by "Marine Services" and "Subsea Services" activities and will meet the new IFRS 8 standard.
Gross operating income before capital gains from vessel sales was stable at 94 million euros. The capital gain from vessel sales totaled 6.3 million euros compared with 11.7 million euros for the first half of 2007.
During this half year, BOURBON complied with the delivery schedule set out in the Horizon 2012 strategy, with the delivery and commissioning of 10 supply vessels, including 1 dedicated to IMR (Inspection, Maintenance and Repair).
The margin rate (EBITDA before capital gains on revenues) amounted to 33%, down by 7.4 points from the first half of 2007 owing to the following:
The 15% decline in the average price of the dollar,
The nearly threefold increase in revenues with external chartered vessels, which generate less profit,
The increase in personnel and maintenance costs, as well as current expenditure designed to guarantee future growth.
Operating income amounted to 52.8 million euros, down 21.5% from the first half of 2007, reflecting increased depreciation figures corresponding to the build-up of the fleet.
BULK DIVISION
The Bulk Division posted revenues of 133.4 million euros in the first half of 2008, up 13.6% at current exchange rate and 30.8% at constant exchange rate compared with the same period in 2007. This activity reaped the benefits of a market that remained extremely buoyant, with Baltic Supramax Index rates of USD 55,292/d compared with 36,450 in the first half of 2007 and 58,603 in the second half of 2007.
Gross operating income amounted to 38.8 million euros, up 30.1% over the first half of 2007.
Operating income totaled 37.1 million euros, up 38.5% over 2007.
OUTLOOK
BOURBON’s activity in the second half will continue in line with the Horizon 2012 plan.
The Offshore Division will be boosted by the commissioning of 32 new vessels and by the renewal of contracts in a still buoyant offshore market.
The Bulk Division’s results will include a $40.6 million capital gain following the July sale of the Supramax Fructidor bulk carrier and the Division will take delivery of two new vessels in January 2009. BSI rates are expected to remain at a high level, albeit lower than levels in the first half.
The disposal of the shares held in the Rigdon companies in early July will yield a capital gain of 58.2 million euros and will have a positive effect of some 170 million euros on BOURBON’s indebtedness.
Finally, BOURBON’s financial results will continue to be influenced by the euro-dollar exchange rate.