- Company's net loss quadruples to 19.2 million euros in H1
- As many as 35 vessels to be pulled from fleet in second half
Bourbon SA, a French supplier of ships and crew to oil and natural gas producers, is pulling as many as 35 vessels from operation in the second half of the year as overcapacity in the deepwater market leads to widening losses.
“The drop in the oil price and the uncertainty of the price recovery will continue to affect the development of new deepwater fields and the level of activity in shallow-water fields,” the Paris-based company said in a statement Wednesday.
Bourbon is the latest oil-services company to warn that the crash in crude prices will hurt business this year as customers delay or cancel exploration and development projects. Seadrill Ltd., the rig-operator controlled by billionaire John Fredriksen, said last week it expects the rout to force an industry consolidation that will leave only the largest offshore players intact.
Bourbon’s first-half net loss widened fourfold to 19.2 million euros ($21.5 million), from a restated 4.8 million euros a year earlier, the Paris-based company said. While Bourbon kept its full-year financial targets, Chief Executive Officer Christian Lefevre said the second half will be tougher.
“The second half will clearly be more difficult than the first half,” Lefevre said on a conference call. In addition to the pulling of supply and subsea vessels, the average daily rates Bourbon is able to charge for vessels “will continue to drop.”
Amid uncertainties in the offshore market and the impact of foreign exchange fluctuations, Bourbon said it will keep an outlook for a stable or slight decrease in adjusted revenues for 2015 and a “slight decrease” in the margin of adjusted earnings before interest, taxes, depreciation, amortization and restructuring or rent costs as a proportion of revenue.
The company said a vessel disposal plan has raised $1.7 billion through the end of the latest six-month period.
Bourbon added one vessel to its fleet in the first half, bringing the total to 506 at the end of June. The average utilization rate dropped 3.4 percentage points from a year earlier to 78.1 percent.
Oilfield surveyor CGG SA, based in Paris, is among other service providers grappling with the rout. The company reported a second-quarter loss and said market conditions will remain difficult. Exane BNP Paribas said last month that CGG may need to raise capital because of its “horrendous” financial situation.