French shipping company Bourbon Offshore recorded a bigger loss in the first half of this year compared to the prior-year period impacted by challenging offshore oil and gas services market.
In its financial report on Thursday, the French company posted adjusted revenue of €459.5 million ($550M), down 23.3% compared with €599.2 million ($717.5M) in the first half of 2016.
In the first half of 2017, the company recorded a net loss of €170.4 million ($204M), compared to €87.3 million ($104.5M) loss in the prior-year period. Group share net loss was €170.1 million compared to €104.3 million 1H 2016.
This year’s result was impacted by unrealized foreign exchange losses amounting to €50 million mainly due to the weakening of the US dollar.
According to the company, during the first half of the year, the offshore services market continued to face a standstill on investment by the oil companies and consequently, a reduction in activity. Bourbon emphasized that the offshore PSV market continues to be affected by significant overcapacity and strong pressure on daily rates.
The company maintained its vessels stacking policy and by the end of the first half, it had 100 supply vessels stacked.
Cost control efforts enabled a reduction of 10% in direct and general costs compared with the second half of 2016 and 15.1% compared with the first half of 2016.
With oil prices having stabilized at around $50, oil companies have adapted and started again exploration-production projects, Bourbon said. Demand remains low; however, signs of a gradual return to drilling and development of existing oilfields are visible in certain countries.
In this context, the company stated, utilization rates can be expected to stabilize in the Subsea and Crew boats segments. The Deepwater offshore and Shallow water offshore segments will see a slight upturn in activity but at prices that are expected to remain under heavy pressure due to the continued impact of vessel overcapacity on the market.
Offshore Energy Today Staff