Bourbon Slumps on New Vessel Financing Worries: Paris Mover

Bourbon SA (GBB), owner of the biggest fleet of supply and crew ships for the oil industry, fell to an eight-week low on worries about financing new vessels.

“Their outlook is relatively bullish but there needs to be more visibility and market confidence about how Bourbon is going to raise funds,” Bastien Dublanc, an analyst at RBC Europe Ltd., said by telephone. “They could go to the market but we don’t have details.”

Bourbon fell as much as 6.6 percent to 23.76 euros, the lowest since Jan. 11, and was trading down 4.9 percent at 1:07 p.m. in Paris. The shares have gained 13 percent since the start of the year.

Net debt rose to 1.955 billion euros ($2.6 billion) at the end of last year with 620 million euros falling due in less than a year, the Paris-based company said in an earnings presentation on its website. The shipowner has sought diversification of financing away from French banks and could obtain about 25 percent of its needs from the financial market by 2015 from none until now, it said.

Bourbon bolstered its vessel-building program last year in anticipation that oil and natural gas explorers will choose new vessels to service their offshore operations. Under a $2 billion expansion plan, Bourbon plans to own 600 ships by 2015, up from 437 at the end of last year. The company will take delivery of 41 vessels this year compared with 39 in 2011, according to the presentation.

Profit Drops

Net income for 2011 fell 83 percent from a year earlier to 6.8 million euros on unrepeated gains and financial costs. Vessel demand and rental rates will probably improve this year, the company said.

Earnings before interest, taxes, depreciation and amortization rose 25 percent to 300.2 million euros, while profit on the same basis rose 33 percent in the second half. The company announced a dividend of 0.82 euros a share, equivalent to last year when free shares were granted.

“We are certain” daily rates for vessels will rise, Chief Executive Officer Christian Lefevre said on a conference call with journalists. “I can’t predict at what rate they will increase.”

Contract renewals in the first three months of this year in the deep offshore business have been done “at higher rates,” he told analysts, noting there was a drop in the fourth quarter.

Daily rates rose 2.4 percent in the marine services division and 2.1 percent for subsea last year, Lefevre said. Prices remain lower than the highs reached in 2007 and 2008.

Demand for Bourbon vessels will increase to service the growing number of rigs, platforms and wellheads, Lefevre said. He forecast “sustained activity” in the North Sea.

Lefevre confirmed a previous outlook for average annual sales growth of 17 percent in the offshore division and said 64 percent of the planned vessel expansion plan has been completed.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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