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BOURBON 2018 Annual Results

Friday, 15 March 2019 | 00:00

317 vessels in operation (full-time equivalent) with a utilization rate that has stabilized over the last few quarters at 82.3% (compared to 82.4% in 2017) and daily rates slightly up over the last three quarters. Adjusted EBITDAR stands at €142.7 million (consolidated EBITDAR of €130.5 million), impacted by an unfavorable exchange rate and a decrease in activity for Bourbon Subsea Services. #BOURBONINMOTION strategic action plan: signing of the first integrated service contracts and deployment of operational models’ transformation as part of the Smart Shipping program. The group has decided to close its financial statements with regards to the going concern in light of the trust it has in the outcome of the discussions with lenders and the active search of new financial partners.

Operational indicators      
Number of vessels (FTE)* 500.1 511.5 -2.2%
Total fleet in operation (FTE) 317.1 333.7 -5.0%
Number of stacked vessels (FTE) 182.9 178.2 +2.6%
Utilization rate of the fleet in operation (%) 82.3 82.4 -0.1pt
Average utilization rate (%) 52.2 53.7 -1.5pt
Average daily rate ($/d) 7,942 8,725 -9.0%
* FTE : Full Time Equivalent    
In € millions, unless otherwise noted 2018 2017 Change
Financial performance  
Adjusteda revenues 689.5 860.6 -19.9%
(change at constant rate) -13.0%
Operational and general costs (546.9) (608.3) -10.1%
Adjusteda EBITDAR (ex. cap. gain) 142.7 252.4 -43.5%
EBITDAR / Revenues 20.7% 29.3%  
Bareboat charters (148.3) (164.4) -9.8%
Adjusteda EBITDA (4.3) 87.8 -104.9%
Impairment (75.7) (196.8) -61.5%
Adjusteda EBIT (313.9) (403.9) -22.3%
EBIT (320.3) (406.6) -21.2%
Net income (group share) (457.8) (576.3) -20.5%

“BOURBON’s 2018 results reflect the 4th year of our industry’s cyclical downturn. However, for the first time since 2014, our utilization rates and daily rates have stabilized over the last three quarters, showing the gradual recovery in our customers’ activity. We generated positive free cash flow of slightly over €100 million, reflecting the continued efforts of our teams to manage costs.

Today, we are focusing on implementing our strategic action plan #BOURBONINMOTION in order to regain room for maneuver through the development of new services, a drastic G&A reduction plan and the transformation of our operational models via our Smart Shipping program”, announced Gaël Bodénès, Chief Executive Officer of BOURBON Corporation.

(a) Adjusted data:

The adjusted financial information is presented by Activity and by Segment based on the internal reporting system and shows internal segment information used by the principal operating decision-maker to manage and measure the performance of BOURBON (IFRS 8). Internal reporting (and thus the adjusted financial information) records the performance of operational joint ventures on which the group has joint control using the full integration method. Furthermore, internal reporting (and again the adjusted financial information) does not take into account IAS 29 (Financial Reporting in Hyperinflationary Economies), applicable for the first time in 2017 (retroactively from January, 1) to an operational joint venture in Angola.
The reconciliation between the adjusted data and the consolidated data can be found in Appendix I on page 10

2018 Financial Results

Income statement (adjusted data)

Adjusted revenues came out at €689.5 million, representing a decline of 19.9% on the previous year, impacted by an unfavorable exchange rate, the reduction in the number of chartering days, project delays in the Subsea activity and delays to reactivate our vessels. At constant exchange rates, the decline in revenue would have been 13%.
The number of stacked vessels and the utilization rate of the fleet in operation have stabilized, reflecting reactivations and a timid market recovery.

Operating and general costs have continued to decrease, capturing the first benefits of the deployment of the #BOURBONINMOTION plan and notably the Smart G&A program. Implemented in October 2018, this program should lead to additional full-year savings in general costs, in addition to the 35% savings already generated since 2014. Operating and general costs were, however, impacted in 2018 by transformation costs due notably to the efforts to streamline our operating companies and onshore maintenance bases as well as additional expenses related to ongoing renegotiations with financial partners.

As a result, the EBITDAR/adjusted revenues margin amounted to 20.7%, down by 8.6 points on the previous year. At constant exchange rates, the decline would have been 3.1 points to 26.2%.

Adjusted EBIT for 2018 registered an impairment loss of -€75.7 million, following impairment tests carried out as of December 31, 2018 and exceptional depreciations recorded on certain non-strategic vessels held for sale.

Net income, group share, stood at -€457.8 million compared to -€576.3 million in the previous year. It includes a financial loss of -€116.6 million.

Balance Sheet Statement

Consolidated Capital Employed 12/31/2018 12/31/2017
In € millions
Net non-current Assets 1,704.1 2,028.3
Non-current Assets held for sale 12.0
Working Capital (79.0) 102.0
Total Capital Employed 1,637.1 2,130.3
Shareholders’ equity 201.0 643.6
Non-current liabilities (provisions and deferred taxes) 158.5 121.5
Net debt 1,277.6 1,365.2
Total Capital Employed 1,637.1 2,130.3

In addition to usual depreciations and amortizations, net non-current assets decreased by €312.2 million, in line with our will to streamline our fleet by disposing of “non-smart” and non-strategic vessels. 15 vessels were sold and six were scrapped. This decrease is also related to impairment losses recorded as of December 31, 2018.

The working capital requirement was negative at -€79.0 million compared to +€102 million as of December 31, 2017, mainly due to the unpaid bareboat charter debt, inventory reductions and the decrease in trade receivables.

Consolidated Shareholders’ equity amounted to €201.0 million as of December 31, 2018, down by €442.6 million due to the loss recorded for the year.

In accordance with IFRS, €1,052.2 million in borrowings were reclassified as current liabilities as of December 31, 2018. These are the loans which are the subject of ongoing discussions and covered by a general waiver, borrowings for which payments have been suspended and borrowings that have contractual clauses which may entail early repayment.

Cash flow (see appendix IV: Simplified Consolidated Cash Flow Statement)

Consolidated cash remained generally stable over 2018 with a slight €6 million increase:

The positive cash flows generated by operations, at €135.8 million benefited from the bareboat charter payment suspension.

Vessel sales (including 8 “non-smart” vessels and 2 non-strategic vessels) enabled cash inflows of €13.5 million, whilst planned vessel dry dock expenses and other investments remained at the same level as the previous year. Cash flows used in investing activities amounted to -€31.7 million.

Cash flows used in financing activities were -€95.5 million. These mainly reflect the suspension of the servicing of the majority of the Group’s debt within the context of ongoing negotiations with its lenders.

BOURBON confirms that the discussions with its main financial partners and the active search for new financing are ongoing, in order to balance the servicing of its debt with its performance.

In this context, several offers under conditions notably due diligences have been received by the group proposing in particular new financing and a debt reduction including for some of them, conversion of part of this debt into equity.

At this stage, the terms and conditions of these offers, including the financial parameters, are being evaluated by the group and its advisors. March 13th, 2019, the Board of Directors carried out a preliminary review of these propositions. BOURBON specifies that no decision or commitment has been made and that no exclusivity has been granted to any of the financial partners it is in discussion with. The company remains confident in its ability to find such a solution and will notify the market in due time according to regulation.

This situation raises a material uncertainty with regards to the going concern. The Group has, however, prepared its consolidated financial statements at December 31, 2018 maintaining the going concern assumption given:

– The confidence it has in the outcome of the discussions with its lenders and debt-holders

– The active search for new financial partners which has resulted in the receipt of several proposals under conditions

– The cash flow generated by the business allowing the group to meet its current operating needs over the next 12 months.


After four years of drastic reductions, the oil and gas Majors have started to increase their investment commitments again, mainly focusing on Deepwater offshore drilling campaigns and maintenance activities for Shallow water offshore fields in particular. This recovery is already seen in demand for OSV vessels in several market segments and several regions, notably West Africa, the Caribbean zone and the North Sea.

However, it will only be sustainable if the market manages to absorb the global vessel overcapacity and if the main Offshore services players find financial solutions to allow them to reactivate the most modern vessels.

In this complex environment, BOURBON is focusing on its #BOURBONINMOTION strategic action plan, which will enable it to regain room for maneuver and position itself in order to take advantage of the recovery under optimum competitive conditions.

The first results for the various focus points of the action plan are tangible:

  • Service-oriented business models: first successes have been recorded by the three stand-alone companies. An integrated logistics contract has just been signed by Bourbon Marine & Logistics with Shell in Bulgaria, Bourbon Mobility is currently deploying its first on-board entertainment services and Bourbon Subsea Services has won significant turnkey contracts in floating wind turbines.
  • Cost structure: adapting the company’s size to the new economic environment is key, and we are achieving it through our 2 programs Smart G&A and Smart Shipping. After having deployed the Smart Shipping program in pilot mode on six vessels in 2018, the teams are mobilized to deploy it in industrial mode in 2019.


Operational indicators    
Number of vessels (FTE)* 214.5 220.5 -2.7%
Total fleet in operation (FTE) 126.7 123.6 +2.5%
Number of stacked vessels (FTE) 87.8 96.9 -9.4%
Utilization rate of the fleet in operation (%) 87.1 87.4 -0.3pt
Average utilization rate (%) 51.4 49.0 +2.4pts
Deepwater offshore vessels 62.4 62.2 +0.2pt
Shallow water offshore vessels 44.0 40.8 +3.2pts
Average daily rate ($/d) 10,378 11,542 -10.1%
Deepwater offshore vessels 12,895 14,389 -10.4%
Shallow water offshore vessels 7,939 8,669 -8.4%
* FTE : Full Time Equivalent




In € millions, unless otherwise noted 2018 2017 Change %
Financial performance
Adjusted Revenues 357.3 411.2 -13.1%
Deepwater offshore vessels 217.7 256.9 -15.3%
Shallow water offshore vessels 139.6 154.2 -9.5%
Operational & General Costs (283.9) (304.9) -6.9%
Adjusted EBITDAR (ex. capital gains) 73.3 106.2 -31.0%
EBITDAR / Revenues 20.5% 25.8% -5.3pts
Bareboat Charters (104.6) (119.0) -12.1%
Adjusted EBITDA (30.6) (13.2) ns
Impairment (69.0) (167.2) -58.8%
Adjusted EBIT (224.2) (358.1) -37.4%

The 2018 results reflect activity stabilization, with average utilization rates up 2.4 points compared to 2017, mainly driven by the Shallow water Offshore activity. Six vessels have also been reactivated.

The 13.1% decrease in adjusted revenues is mainly due to the decrease in average daily rates corresponding to the renewals of old contracts at current market rates. However, the new contracts are signed at stabilized rates and even very slightly increased rates at the end of 2018.

The reduction in costs amounts to almost 7%, mainly due to the adaptation of the cost structure to the decrease in revenue (site restructuring and closure) as well as the start of the Smart Shipping program leading to the reduction in on-board teams and improvements to safety and technical reliability.

The sale of 8 “non-smart” vessels took place at a slower pace than expected, due to the overcapacity in the OSV vessel market.


Operational indicators    
Number of vessels (FTE)* 265.3 269.0 -1.4%
Total fleet in operation (FTE) 175.6 193.9 -9.4%
Number of stacked vessels (FTE) 89.7 75.1 +19.4%
Utilization rate of the fleet in operation (%) 80.2 79.0 +1.2pt
Average utilization rate (%) 53.1 56.9 -3.8pts
Average daily rate ($/d) 4,308 4,418 -2.5%
* FTE : Full Time Equivalent




In € millions, unless otherwise noted 2018 2017 Change %
Financial performance
Adjusted Revenues 187.7 216.3 -13.2%
Operational & General Costs (155.4) (160.8) -3.4%
Adjusted EBITDAR (ex. capital gains) 32.3 55.4 -41.8%
EBITDAR / Revenues 17.2% 25.6% -8.4pts
Bareboat Charters
Adjusted EBITDA 33.2 55.5 -40.2%
Impairment (5.2) (9.8) -46.9%
Adjusted EBIT (33.8) (16.4) +106,2%

Down by 13.2% compared to 2017 (including -5 pts due to exchange rate effects), 2018 adjusted revenues was mainly impacted by a slower than expected reactivation of Surfers and a higher maintenance and repair activity than 2017 (notably large long-distance crewliner-type transport vessels).

As the fleet’s technical availability rate deteriorated in 2018, Bourbon Mobility carried out significant efforts to streamline onshore maintenance bases to prepare for the recovery and raise our operating standards, notably with the opening of a new base in Angola and the temporary expansion of the Congo base. Margins were down 8.4 points, directly impacted by the decrease in the number of chartering days.

Business recovery is manifest in certain markets, including Nigeria and Congo, and is expected to sustainably consolidate across all West Africa. The teams began to reactivate and reposition Surfers in West Africa, in order to meet the new demand.


Operational indicators    
Number of vessels (FTE)* 20.3 22.0 -7.7%
Total fleet in operation (FTE) 14.8 15.8 -6.3%
Number of stacked vessels (FTE) 5.5 6.2 -11.3%
Utilization rate of the fleet in operation (%) 66.5 84.4 -17.9pts
Average utilization rate (%) 48.5 60.7 -12.2pts
Average daily rate ($/d) 32,592 35,328 -7.7%
* FTE : Full Time Equivalent


In € millions, unless otherwise noted 2018 2017 Change %
Financial performance  
Adjusted Revenues 133.6 220.1 -39.3%
Operational & General Costs (100.1) (134.1) -25.4%
Adjusted EBITDAR (ex. capital gains) 33.4 86.0 -61.1%
EBITDAR / Revenues 25.0% 39.1% -14.1pts
Bareboat Charters (43.7) (45.4) -3.7%
Adjusted EBITDA (10.3) 40.6 ns
Impairment (1.6) (19.8) -92.1%
Adjusted EBIT (54.4) (27.6) +96.6%

Activity saw a significant decrease in 2018, impacted by the reduction in the order book for oil field construction from contractors, and the increase in local content constraints. The decrease of almost 40% in 2018 adjusted revenues is mainly due to the weakness of activity and as a result utilization rates, project delays that started in Q3 and the sale of one vessel. In these market conditions, Bourbon Subsea Services will continue to consider selling its oldest vessels.

Today repositioned in three geographic zones – West Africa, Mediterranean/Middle East-India and South-East Asia – the fleet allows for flexible management of different market dynamics.

Having installed the first 2.4 MW floating wind turbine in Scotland, Bourbon Subsea Services will continue to diversify in 2019, notably in Offshore wind turbines in Portugal. Turnkey projects represented almost 6% of 2018 revenue.


In € millions, unless otherwise noted 2018 2017 Change %
Financial performance
Adjusted Revenues 10.9 13.1 -16.7%
Operational & General Costs (7.3) (8.3) -12.0%
Adjusted EBITDAR (ex. capital gains) 3.6 4.7 -23.5%
EBITDAR / Revenues 33.1% 36.1% -2.9pts
Adjusted EBITDA 3.6 4.9 -25.5%
Adjusted EBIT (1.6) (1.8) -13.3%

Activities included are those that do not fit into either Marine & Logistics, Mobility or Subsea Services segments. The majority of the total represents earnings from miscellaneous ship management activities.

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