Ebola Affects Bourbon’s Operations as Company Swings to LossTara Patel
The deadly Ebola outbreak in Nigeria is affecting Bourbon SA’s operations, the supplier of ships and crew to energy producers said after reporting it swung to a loss in the first half partly on industry cost cutting.
“The mobility of our vessels coming from Nigeria has been restricted by some countries,” Chief Executive Officer Christian Lefevre told reporters. “Vessels coming from Nigeria can’t go directly to Cameroon or Ivory Coast.”
While Bourbon has stopped sending vessels to Nigeria for maintenance, there haven’t been any “significant disruptions” to operations, he said. The company’s Nigerian operations are centered around the southern oil hub of Port Harcourt. The city recorded its first death from the outbreak on Aug. 22.
Bourbon posted a first-half net loss of 4.8 million euros ($6.3 million), after a 14.4 million-euro profit a year earlier, as oil companies cut costs and delay projects, and the ship-supply industry suffers from global overcapacity, the Paris-based company said in a statement.
It fell 3.4 percent to 20.96 euros by 10:14 a.m. in Paris.
“The offshore oil and gas business environment is getting tougher for contractors,” Raymond James analysts wrote in an e-mailed note to investors. Bourbon produced an “uninspiring set of results,” said the analysts, who rate it Underperform.
Sales, up 8.9 percent in the half on a “constant” basis, are expected to be at the “lower end” of a full-year growth forecast of 8 percent and 10 percent, Lefevre said. “Offshore markets during the first half of 2014 were affected by a slowdown in activity, partly due to cost reductions by oil and gas companies and delays on some projects,” he said in the statement.
The company, which took delivery of 23 vessels in the half to bring its fleet to 500, has sold and leased back ships to reduce debt. A plan to sell as much as 30 percent of its supply-vessel fleet will continue through next year, Lefevre said.
The Ebola epidemic in West Africa that has sickened more than 3,000 people may infect 20,000 more and cost at least $490 million to curb, according to a World Health Organization plan. Nigeria has reported at least three cases outside Lagos.