Bourbon anticipates slow recovery as third quarter revenues dipCompany News // November 9, 2017
Bourbon Corporation says its customers "have recovered some margin for manoeuvre but this is not yet reflected in offshore activity."
"We believe that we have reached the low point of the cycle, however recovery will be slow. Our policy of operational excellence, cost control and cash preservation remains key in meeting the requirements of our customers,” said Gaël Bodénès, Chief Executive Officer at Bourbon.
Revenue for the third quarter of 2017 was down 12.7% (-9.2% at constant rates) compared to the second quarter of 2017, havinbg been adversely affected by sluggish activity and strong pressure on rates, despite a few positive signs.
Bourbon said that, in the deepwater offshore and shallow water offshore segments, customer willingness to launch exploration projects and renew medium and long-term contracts should be underlined. It said this is reflected in a slight increase in activity (average utilization rates were up 2 percentage points), although rates are still declining.
The crewboat segments remained resilient, but was impacted by the monsoon seasonality in West Africa.
Revenue from subsea activity fell 23.1% compared to the second quarter of 2017, mainly as a result of a lower number of turnkey projects.
"The improvement in the oil companies' financial positions has not yet been reflected in a generalized recovery of their investment and thus by an increase in the activity in the offshore services market," Bourbon said. "Customers wish to continue to operate at optimum price levels in order to carry on sanctioning offshore projects in competition with onshore projects and shale oil in particular.
"Recovery is expected to be slow and the deepwater offshore and shallow water offshore segments will continue to be affected by vessel overcapacity throughout 2018, in all regions, although some signs of improvement will be seen at local level."