Bourbon cites effects of 40-year crisis as it unveils its 2016 resultsCompany News // March 16, 2017
Bourbon says the marine services industry is going through the most acute crisis in the last 40 years due to the sharp slowdown in the offshore oil and gas industry.
"Tomorrow will not see a return to yesterday’s model," said Jacques de Chateauvieux, Chairman and Chief Executive Officer of Bourbon Corporation.
The company recently implemeted a plan to improve the company’s cashflow and reduce the need for new funding.
As previously reported, Bourbon has signed an agreement with its financial partners to reschedule the maturities of most of its debt.
Ongoing cost control efforts, which include both efficiency gains and proactive vessel stacking, have delivered a significant cost-reduction (in operating and general costs) of 19 per cent compared with 2015, the company said.
For the full year 2016, 70.6 supply vessels full time equivalent were stacked, which is 29 per cent of its supply vessel fleet.
Following impairment tests carried out as of 31 December 2016, a €36 million impairment loss was recognized on goodwill and assets allocated to the company's deepwater offshore segment.
On the outlook for the sector, Bourbon said: "Positive signs are now visible of a recovery in exploration and production investment... offshore is expected to rebound at the end of 2017 and in 2018.
"These are the result of stabilizing oil prices and the need for oil and gas majors to maintain production levels and find new reserves in the medium term.
"Production support activity and maintenance operations on existing fields are expected to resume gradually over the next few quarters.
"In this context, the progress made in the subsea and crewboat segments in terms of utilization rates is set to continue," said the company. "However, the deepwater and shallow water offshore segments will continue to feel the effects of the downturn in 2017. Bourbon is therefore pursuing efforts to streamline operations, cut costs and protect cash, while maintaining its focus on operational excellence."