BOURBON: Financial information 3rd quarter and 9 months 2017
Paris, November 9, 2017
BOURBON Financial information 3rd quarter and 9 months 2017
Revenue for the 3rd quarter was down 12.7% (-9.2% at constant rates) compared to the 2nd quarter of 2017, still impacted by sluggish activity and strong pressure on rates, despite a few positive signs
In the Deepwater offshore and Shallow water offshore segments, customer willingness to launch exploration projects and renew medium and long-term contracts should be underlined. This is reflected in a slight increase in activity (average utilization rates up 2 points) although rates are still declining.
The Crew boats segments remained resilient, impacted by the monsoon seasonality in West Africa.
Revenue from the Subsea activity fell 23.1% compared to the 2nd quarter of 2017, mainly impacted by a lower number of turnkey projects.
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (a)
Marine Services
149.1
203.2
-26.6%
162.3
476.2
681.1
-30.1%
Deepwater offshore vessels
59.9
81.4
-26.4%
68.3
197.0
264.2
-25.4%
Shallow water offshore vessels
37.8
60.9
-38.0%
39.1
114.0
229.1
-50.2%
Crew boats
51.4
60.8
- 15.5%
55.0
165.2
187.8
-12.0%
Subsea Services
52.1
50.0
+4.3%
67.8
176.5
160.8
+9.8%
Others
3.0
5.9
-49.1%
3.8
11.0
16.3
-32.6%
Total adjusted revenues (change at constant rates)
204.3
259.1
-21.2% -17.7%
234.0
663.7
858.2
-22.7% -22.8%
IFRS 11 impact***
(11.9)
(19.4)
(19.2)
(51.7)
(62.0)
GROUP TOTAL
192.4
239.7
-19.7%
214.7
612.1
796.2
-23.1%
Average utilization rate Deepwater Shallow water Subsea Crew boats
53.4% 62.2% 42.1% 63.4% 55.1%
59.7% 66.4% 53.1% 57.0% 61.1%
-6.3 pts -4.2 pts -11.0 pts +6.4 pts -6.0 pts
53.3% 60.3% 40.0% 65.7% 56.4%
53.7% 61.1% 39.2% 62.2% 57.6%
64.4% 71.0% 62.3% 55.1% 64.1%
-10.7 pts -9.9 pts -23.1 pts +7.1 pts -6.5 pts
Average daily rate (US$/j)
8,668
9,494
-8.7%
9,075
8,897
9,829
-9.48%
"Our customers have recovered some margin for maneuver but this is not yet reflected in Offshore activity. We believe that we have reached the low point of the cycle, however recovery will be slow. Our policy of operational excellence, cost control and cash preservation remains key in meeting the requirements of our customers," declares Gaël Bodénès, Chief Executive Officer of BOURBON Corporation.
"More than ever, BOURBON must transform in order to respond to this new cycle focused on operational excellence at optimum cost".
(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). The 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. Adjusted comparative figures are restated accordingly.
MARINE SERVICES
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (in € millions)
149.1
203.2
-26.6%
162.3
476.2
681.1
-30.1%
Number of vessels (end of period)*
489
491
-2 vessels
490
491
491
-
Average utilization rate
52.9%
59.9%
-7.0 pts
52.7
53.3%
64.9%
-11.6 pts
* Vessels operated by BOURBON (including vessels owned or on bareboat charter).
The Marine Services business recorded an 8.1% decrease in its adjusted revenues compared to the 2nd quarter of 2017, mainly impacted by the renewal of the last long-term contracts at new market rates in the Deepwater offshore segment and seasonal trends in the Crew boats activity. Utilization rates improved compared with the previous quarter in Deepwater offshore and Shallow water offshore but pressure on daily rates remains strong, mainly due to the vessel overcapacity in these 2 segments.
Marine Services: Deepwater offshore vessels
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (in € millions)
59.9
81.4
-26.4%
68.3
197.0
264.2
-25.4%
Number of vessels (end of period)*
89
89
-
89
89
89
-
Average utilization rate
62.2%
66.4%
-4.2 pts
60.3%
61.1%
71.0%
-9.9 pts
Average daily rate (US$/day)
13,781
16,492
-16.4%
14,863
14,687
16,939
-13.3%
* Vessels operated by BOURBON (including vessels owned or on bareboat charter).
Adjusted revenues for the Deepwater offshore segment were mainly impacted by lower average daily rates and the end of contracts for several vessels in West Africa. The recovery of drilling activity was nevertheless confirmed, with stable average utilization rates over 3 quarters.
Marine Services: Shallow water offshore vessels
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (in € millions)
37.8
60.9
-38.0%
39.1
114.0
229.1
-50.2%
Number of vessels (end of period)*
131
133
-2 vessels
132
131
133
-2 vessels
Average utilization rate
42.1%
53.1%
-11.0 pts
40.0%
39.2%
62.3%
-23.1 pts
Average daily rate (in US$/day)
8,371
10,365
-19.2%
8,749
8,856
11,061
-20.0%
* Vessels operated by BOURBON (including vessels owned or on bareboat charter).
In Shallow water offshore, utilization rates were slightly up, as they have been since the 1st quarter of 2017. Several vessels were reactivated during the quarter in order to serve medium and long-term contracts. However, as daily rates continued to be driven downward, adjusted revenues showed a 3.4% quarter on quarter reduction.
Marine Services: Crew boat vessels
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (in € millions)
51.4
60.8
-15.5%
55.0
165.2
187.8
-12.0%
Number of vessels (end of period)
269
269
-
269
269
269
-
Average utilization rate
55.1%
61.1%
-6.0 pts
56.4
57.6%
64.1%
-6.5 pts
Average daily rate (in US$/day)
4,453
4,473
-0.4%
4,393
4,427
4,477
-1.1%
Adjusted revenues for the Crew boats segment were down 6.5% compared with the 2nd quarter of 2017, impacted by a seasonal slowdown in activity, the renewal of several contracts at lower daily rates and movements of FSIV (Fast Support Intervention Vessels) between different regions to meet new contracts beginning at the end of this quarter. Overall segment activity was stable with slightly lower utilization rates (-1.3%) compared with the 2nd quarter of 2017 and price levels up since the 1st quarter of 2017. Demand remains strong for large Crew boats, representing an economic alternative to helicopter transportation.
Subsea Services
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (in € millions)
52.1
50.0
+4.3%
67.8
176.5
160.8
+9.8%
Number of vessels (end of period)*
22
22
-
22
22
22
-
Average utilization rate
63.4%
57.0%
+6.4 pts
65.7%
62.2%
55,1%
+7.1 pts
Average daily rate (in US$/day)
34,304
37,182
-7.7%
37,976
36,649
40,001
-8.4%
* Vessels operated by BOURBON (including vessels owned or on bareboat charter).
Adjusted revenues for the Subsea Services activity were down 23.1% compared with the 2nd quarter of 2017, mainly impacted by a lower number of turnkey projects and the slowdown in contractors' activity. Utilization rates remained stable overall in a very competitive environment reflected in the level of daily rates. The IMR (Inspection, Maintenance & Repair) business remained stable.
BOURBON Subsea Services continues to pursue its diversification strategy with its partners in regions of operation, such as the Persian Gulf, Asia, West Africa and Central America.
Other
Quarter
9 months
Q3 2017
Q3 2016
Var 2017/2016
Q2 2017
2017
2016
Var 2017/2016
Adjusted Revenues (in € millions)
3.0
5.9
-49.1%
3.8
11.0
16.3
-32.6%
Activities included are those that do not fit into either Marine Services or Subsea Services. For the most part, they correspond to the results of various ship management and logistics activities and to the cement carrier Endeavor, which was sold in July 2017.
OUTLOOK
The improvement in the oil companies' financial positions has not yet been reflected in a generalized recovery of their investments and thus by an increase in the activity of our Offshore services market. Customers wish to continue to operate at optimum price levels in order to carry on sanctioning Offshore projects in competition with Onshore projects and shale oil in particular.
Recovery is expected to be slow and the Deepwater offshore and Shallow water offshore segments will continue to be affected by vessel overcapacity throughout 2018 in all geographical regions, although some signs of improvement will be seen at local level. Utilization rates should continue to resist in the Crew boats and Subsea segments.
Facing this "new normal", BOURBON must pursue the radical change of its business model and its efforts to streamline operations, reduce costs and preserve cash. To meet the competitiveness needs of our Offshore business and the new requirements of our customers, we have to respond to the down cycle that is metamorphosing the face of our industry and offer modern vessels, teams capable of providing service excellence, as well as new innovative and efficient ways of operating.
ADDITIONAL INFORMATION
BOURBON's results will continue to be influenced by the €/US$ exchange rate.
FINANCIAL CALENDAR
2017 4th Quarter and Full Year Financial Information press release
February 8, 2018
2017 Annual Results press release and presentation
March 15, 2018
APPENDIX
Quarterly adjusted revenue breakdown
In millions of euros
2017
2016
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Marine Services
149.1
162.3
164.8
182.9
203.2
218.5
259.5
Deepwater offshore vessels
59.9
68.3
68.8
72.8
81.4
84.2
98.6
Shallow water offshore vessels
37.8
39.1
37.1
50.1
60.9
73.6
94.6
Crew boats
51.4
55.0
58.9
60.0
60.8
60.7
66.3
Subsea Services
52.1
67.8
56.6
56.4
50.0
60.9
50.0
Other
3.0
3.8
4.1
5.1
5.9
5.3
5.0
Total adjusted revenues
204.3
234.0
225.5
244.4
259.1
284.7
314.5
Adjustments*
(11.9)
(19.2)
(20.6)
(20.0)
(19.4)
(20.1)
(22.5)
TOTAL CONSOLIDATED*
192.4
214.7
204.9
224.4
239.7
264.6
292.0
* Effect of consolidation of joint ventures using the equity method.
Quarterly average utilization rates for the offshore fleet
In %
2017
2016
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Marine Services
52.9
52.7
54.3
57.1
59.9
64.5
70.3
Deepwater offshore vessels
62.2
60.3
61.0
60.5
66.4
69.7
77.2
Shallow water offshore vessels
42.1
40.0
35.6
44.6
53.1
62.5
71.3
Crew boats
55.1
56.4
61.4
62.2
61.1
63.8
67.5
Subsea Services
63.4
65.7
57.5
63.3
57.0
56.0
52.3
"Total fleet excluding Crew boats"
51.4
49.8
46.8
52.1
58.3
64.5
71.7
"Total fleet"
53.4
53.3
54.5
57.4
59.7
64.2
69.5
Quarterly average daily rates for the offshore fleet
In US$/day
2017
2016
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Deepwater offshore vessels
13,781
14,863
15,084
15,526
16,492
16,537
17,630
Shallow water offshore vessels
8,371
8,749
9,534
9,958
10,365
10,712
11,967
Crew boats
4,453
4,393
4,270
4,359
4,473
4,405
4,538
Subsea Services
34,304
37,976
37,488
35,195
37,182
39,583
44,119
"Total fleet excluding Crew boats"
13,685
14,955
15,267
15,081
15,260
15,265
16,299
Quarterly number of vessels (end of period)
In number of vessels*
2017
2016
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Marine Services
489
490
491
491
491
490
492
Deepwater offshore vessels
89
89
89
89
89
89
89
Shallow water offshore vessels
131
132
133
133
133
133
133
Crew boats
269
269
269
269
269
268
270
Subsea Services
22
22
22
22
22
22
22
FLEET TOTAL
511
512
513
513
513
512
514
* Vessels operated by BOURBON (including vessels owned or on bareboat charter).
Nine month average utilization rates for the offshore fleet
In %
9 months
2017
2016
Marine Services
53.3
64.9
Deepwater offshore vessels
61.1
71.0
Shallow water offshore vessels
39.2
62.3
Crew boats
57.6
64.1
Subsea Services
62.2
55.1
"Total fleet excluding Crew boats"
49.3
64.8
"Total fleet"
53.7
64.4
Nine month average daily rates for the offshore fleet
In US$/day
9 months
2017
2016
Deepwater offshore vessels
14,687
16,939
Shallow water offshore vessels
8,856
11,061
Crew boats
4,427
4,477
Subsea Services
36,649
40,001
"Total fleet excluding Crew boats"
14,673
15,626
Breakdown of adjusted revenues by geographical region
In millions of euros
Third quarter
9 months
Q3 2017
Q3 2016
Change
2017
2016
Change
Africa
118.9
131.0
-9.2%
384.3
480.4
-20.0%
Europe & Mediterranean/Middle East
31.1
45.7
-32.0%
91.5
116.3
-21.3%
Americas
36.0
52.9
-32.0%
115.4
171.2
-32.6%
Asia
18.3
29.5
-38.0%
72.6
90.3
-19.6%
Other key indicators
Quarterly breakdown
2017
2016
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Average €/US$ exchange rate for the quarter (in €)
1.17
1.10
1.06
1.08
1.12
1.13
1.10
€/US$ exchange rate at closing (in €)
1.18
1.14
1.07
1.05
1.12
1.11
1.14
Average price of Brent for the quarter (in US$/bbl)
55
51
54
49
46
46
34
Nine month breakdown
9 months
2017
2016
Average nine month €/US$ exchange rate (in €)
1.11
1.12
€/US$ exchange rate at closing (in €)
1.18
1.12
Average nine month price of Brent (in US$/bbl)
52
42
About BOURBON
Among the market leaders in marine services for offshore oil & gas, BOURBON offers the most demanding oil & gas companies a wide range of marine services, both surface and sub-surface, for offshore oil & gas fields and wind farms. These extensive services rely on a broad range of the latest-generation vessels and the expertise of almost 9,300 skilled employees. Through its 37 operating subsidiaries the group provides local services as close as possible to customers and their operations throughout the world, of the highest standards of service and safety.
BOURBON provides two operating activities (Marine Services and Subsea Services) and also protects the French coastline for the French Navy.
In 2016, BOURBON'S revenue came to €1,102.6 million and the company operated a fleet of 514 vessels.
Placed by ICB (Industry Classification Benchmark) in the "Oil Services" sector, BOURBON is listed on the Euronext Paris, Compartment B.
