Blue-chip OSV operator Bourbon Corp. released its third quarter earnings on Wednesday, and the numbers show a lower level of chartering activity – a reversal from the firm's relatively strong performance earlier in the year.
Group revenues for the first nine months were down 20 percent from the same period last year.
Out of a fleet of over 500 vessels, Bourbon has stacked nearly 90 ships. Overall utilization is at 60 percent, down from about 80 percent at the end of 2015. Shallow water OSV utilization has taken the biggest hit, down to roughly 50 percent.
Average third quarter day rates for larger vesels were down to $15,000 from about $18,000 in the same period last year.
Still, Jacques de Chateauvieux, chairman and CEO of Bourbon, remains optimistic about the outlook for next year. "The expectations of a potential rebalancing of oil supply and demand in 2017 on account of the sharp drop in investment by oil companies, as well as the search for agreements between producer countries, may mark the start of a recovery in activity," he said. "In this perspective, Bourbon is focusing on operational excellence and cost control, with a long-term vision where the benefits of the digital revolution could prove decisive."
The firm announced in March that it was diversifying into natural gas liquids transportation with the purchase of Singapore-based Greenship Gas, a holding company belonging to JACCAR, Bourbon's majority shareholder. Greenship owns Evergas, a natural gas liquids carrier operator with about 30 ships, including INEOS' new Dragon-class vessels. However, in May, Bourbon said that it would be delaying the acquisition due to financing difficulties. Bourbon's board has said that diversication remains a strategic goal.
Market leader Tidewater, Bourbon's largest competitor, is facing more severe financial troubles. Tidewater suffered a loss of $90 million on revenues of $170 million for the quarter ending June 30. It has until November 11 to restructure its debt without entering bankruptcy. As of November 3, Tidewater's shares were trading at $1.52 on the NYSE, down from about $60 in November 2013; data-driven analysis portal MacroAxis gives Tidewater a 50 percent probability of bankruptcy.