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Bourbon reports increased operating income

"With Gross Operating Income (EBITDA) of 115.1 million euros, up 12.7%, the first half of 2006 confirmed the results expected under the BOURBON growth plan," announced Jacques de Chateauvieux, Chairman and CEO of Paris-based Bourbon.

"The Offshore Division and Towage & Salvage Division recorded very strong operating results," said de Chateauvieux. "The commissioning of new vessels in a promising market strengthens our leadership in modern offshore."

Gross Operating Income totaled 115.1 million euros, up 12.7% in the first half of 2006. This strong performance was achieved by the sharp growth in the Offshore Division, particularly in Africa, and by the solid performance achieved by the Towage & Salvage Division. However, the Bulk Division was impacted by lower cargo rates.

Operating income rose 7.6% to 71.2 million euros and reflects the increase in amortization and depreciation due to the rise in the number of vessels in the fleet.

BOURBON recorded capital expenditures of 252 million euros for the half year.

Offshore Division

The Offshore Division recorded revenues of 170 million euros, an increase of 32.4%.

Bourbon says growth was driven by a favorable market and "as a direct result of investments made in this sector, since 57% of our sales were generated by vessels acquired since 2003. This performance induced a sharp improvement of +38% in operating income to 35.9 million euros."

During the first six months, Bourbon took delivery of 15 new vessels (6 supply vessels and 9 passenger transport/ crewboats)t. As of June 30, 2006, the Offshore Division fleet had 175 units in operation and 92 vessels on order.

Towage & Salvage

The Towage & Salvage Division posted revenues of 65.6 million euros, up 18.2%, in the first half of 2006.

As the towage business is primarily a fixed-cost business, the growth in revenues generated strong growth in the operating income, which reached 15.2 million euros over the first six months of the year.

Bulk Division

Revenues for the Bulk Division down 16% to 82.1 million euros, reflecting a drop in revenues from vessels, which was less serious however than the 37.9% drop in the Baltic Supramax Index, which fell from USD 29,000 in the first half of 2005 to USD 18,000 in the first half of 2006;

Bourbon noted that "operating income of 16.1 million euros remains high, although it was down 41.7% compared to first half 2005 in which historic performance levels were reached on a very high market."

"In March 2006, to the general surprise of the sector," says Bourbon, "the decline in the market turned around and the indexes have continued to climb since then. Because of the long-term contract policy in this segment however, this yearŐs second-half results will not benefit from this increase in the same proportions."

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