Bourbon Spending Billions on Offshore Boats (Again!) Bourbon's marine investment, including the new Horizon 2010 plan calling for $1.6b in investment in its offshore division to expand its massive fleet of offshore vessels, is seemingly paying off as the company reported sharp increases in income and revenue for the year 2006. "2006 was very good overall for offshore business activities," said Jacques de Chateauvieux, Bourbon Chairman and CEO. These results are significant as they exclusively reflect Bourbon's scope as a pure player in marine services. Bourbon benefited from growth in the offshore oil and gas marine services sector (+35.8%) in 2006: revenues totaled 717.6m Euros, an increase of 16.8% over the previous year. Gross operating income was 277.6m Euros (+33.8%) after taking into account the 19m Euros profit on sales of vessels during the year. Bourbon's operating income rose significantly to 181.4m Euros (+44.2%), driven by the expansion of the fleet -- which included 31 new vessels in 2006 -- and conditions in the oil and gas offshore market, a solid performance for towage and salvage, and the increase in cargo rates that began to produce effects in the second half. Bourbon's current success is driven by the tremendous amount of activity in the offshore market, particularly the deepwater segment, as oil majors continue to push the boundaries in terms of discovering and recovering new resources, while simultaneously employing new means to maximize production from existing wells. Bourbon's average contract length is three years, and de Chateauvieux reports that the company is enjoying good success at renewing expiring contract at higher rates. "Moreover, and in line with our Horizon 2010 strategy, we are continuing our investments to expand our fleet and offer our most demanding clients worldwide the services of a full range of new generation, innovative and high- performance vessels." Offshore contracts renewed and the contracts for the 31 new vessels commissioned in 2006 benefited from a very strong market. According to de Chateauvieux, 70 percent of Bourbon's offshore turnover comes from the burgeoning West Africa region, which is experiencing fast growth in the deepwater segment. While analysts ponder the future direction of the increasingly hot offshore oil market, de Chateauvieux sees a number of positive signs that the business will continue. We see oil companies investing in finding new reserves as well as maximizing existing wells, de Chateauvieux said. In addition, many of the national oil companies want to 44 MTR be a part of this, and they will be an engine for further investment. At the same time, there are many bottlenecks to get equipment out and working, and we expect this cycle to be even longer than before. While Bourbon is known as a major player in the deepwater offshore market, de Chateauvieux said that there is interesting growth potential in the shallow vessel market Jacques de Chateauvieux, Bourbon Chairman and CEO as well, as the much of the world fleet is 20+ years old and approaching retirement age. -- Greg Trauthwein www.bourbon-online.com Bourbon Revenue (In millions of Euros) End of Dec. 2006 717.6 277.6 181.4 11.7 164.9 152.9 152.9 Revenues Gross operating income (EBITDA) Operating income (EBIT) Net gains from disposal of assets & income from assets due for sale Net income Net income, group share Net income, group share (excluding capital gain on Vindémia) End of Dec. 2005 614.4 207.4 125.8 111.2 215.0 205.0 111.0 Change End of Dec. 2005 Publ. +16.8% 1 022.0 +33.8% 240.3 +44.2% 148.2 94.1 215.0 205.0 111.0 -23.3% -25.4% +37.7% End of Dec. 2006 Revenues 376.6 Gross operating income (EBITDA) (% of revenues) 185.1 (49.2%) Operating income (EBIT) (% of revenues) 112.8 (30.0%) Offshore Division End of Dec. 2005 277.2 115.6 (41.7%) 58.5 (21.1%) % Change +35.8% +60.1% +92.9% Towage & Salvage Division Revenues Gross operating income (EBITDA) (% of revenues) Operating income (EBIT) (% of revenues) End of Dec. 2006 129.7 End of Dec. 2005 114.9 27.9 (24.3%) 15.6 (13.6%) % Change +12.9% +46.7% +73.1% 40.9 (31.6%) 27.0 (20.8%) Bulk Division Revenues Gross operating income (EBITDA) (% of revenues) Operating income (EBIT) (% of revenues) End of Dec. 2006 169.2 38.9 (23.0%) 35.0 (20.7%) End of Dec. 2005 182.9 53.1 (29.0%) 50.1 (27.4%) % Change -7.5% -26.7% -30.1% April 2007
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