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May 7, 2009

Bourbon reports increased revenues

Paris-headquartered Bourbon reports that revenues for the first quarter of 2009 were up 12.8% compared with the same period in 2008, totaling 238.7 million euros. The Offshore Division posted strong growth, benefiting from the full effect of vessels commissioned in 2008. The Bulk Division, though, felt the dual effect of an activity slowdown and a collapse in freight rates.

"In a market environment now affected by the economic slowdown and falling oil prices, the Offshore Division still has strong potential for growth owing to its investment strategy in innovative and high performance vessels at lower costs for clients," says Chairman and CEO Jacques de Chateauvieux.

Year-on-year, revenues for the Offshore Division in the first quarter were up 47.7% (+36.2% at constant exchange rates) to 202.0 million euros. The growth in this quarter was due mainly to the full impact of the vessels commissioned in 2008, and the deliveries, early this year, of five supply vessels (including four Bourbon Liberty vessels) and 14 crew-boats.

The sharp reduction in revenues in the Bulk Division in the first quarter of 2009 to 29.9 million euros (a decline of 54.4% compared with the first quarter of 2008) reflects an activity slowdown (6 full time equivalent vessels less) and the sharp drop in freight rates (-78%)--the Baltic Supramax Index (BSI) average for the first quarter of the year is $10,875/day compared with the first quarter of 2008, when it averaged $50,265/day. Bourbon says its long-term contracting policy has enabled it to limit the effect of unfavorable trends.

During the quarter, the Bulk Division took delivery of two Supramax vessels, bringing the fully owned fleet to 7 units.

OUTLOOK

Offshore Division

The offshore market, with its strong medium-term potential, reflects the investment strategy of the oil companies and the trend in sustained demand by the large developing countries, is undergoing a period affected in the short-term by the following factors:

Low oil prices

Anticipation of a drop in day rates in response to a desire to lower customer costs

Availability in some markets (United States, Norway, etc.) and for some kinds of vessels (generally high end) of a number of units exceeding current demand.

Bourbon says its innovative, high performance vessels are reaping the benefits of a still buoyant market. They have a high utilization rate and are being well received by customers, enabling them to sustain prices. It says that in 2009

the Offshore Division should post growth at least in line with the average expected for the period under the company's Horizon 2012 plan.

Bulk Division

In the bulk industry, the caution of the players is reflected by the stable forward freight rates that guarantee a return on the contracts made on the vessels. The cancellation or change in delivery schedule for vessels under construction, the importance of demolition for old vessels and the end of merchandise destocking may have a favorable effect on future rates.

In the light of the knowledge we have today, says, Bourbon, "we do not believe , at the level of the market, that the positive contribution of the Bulk Division Activity is in doubt, even though its results will be significantly reduced."


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