Bourbon 1Q Results

Bourbon’s revenues for the first quarter of 2009 were up 12.8% compared with the same period in 2008, totaling $320.8m. The Offshore Division posted strong growth, benefiting from the full effect of vessels commissioned in 2008 and a favorable base effect. The Bulk Division felt the dual effect of an activity slowdown and a collapse in freight rates. Finally, the taking into account of the rate of the dollar makes the comparison favorable for Bourbon.

"In a market environment now affected by the economic slowdown and falling oil prices, the Offshore Division still has strong potential for growth owing to its investment strategy in innovative and high performance vessels at lower costs for clients,” said Jacques de Chateauvieux, Chairman and Chief Executive Officer of Bourbon. The medium-term outlook is still favorable, and while uncertainty about the recovery affects our clients short-term decisions, the outlook for growth under the Horizon 2012 plan still holds true."

Year-on-year, revenues for the Offshore Division in the first quarter were up 47.7% (+36.2% at constant exchange rates) to $271.6m. The growth in this quarter was due mainly to the full impact of the vessels commissioned in 2008, and the deliveries, early this year, of five supply vessels (including 4 Bourbon Liberty vessels) and 14 crew-boats.

From one quarter to another, the activity is down owing to the effect of non-recurring items, a sizeable payment for salvage services received in the last quarter of 2008, as well as the lack of availability of an especially large number of vessels early this year due to routine maintenance.

Marine Services for this quarter saw a sustained pace of commissioning of new vessels, including the Bourbon Liberty vessels, which are enjoying a high satisfaction rate with customers

In Subsea Services, the use of charters is still necessary while the commissioning of the first IMR vessels, now under construction in China, is not scheduled before the second half of 2010.

In Africa, which accounts for 67% of the Division's revenues, markets are still growing, in a context favorable to well established players, of which Bourbon is one.

In the Gulf of Mexico, where Bourbon has little or no presence, and in the North Sea, the spot markets are affected by the activity slowdown while the number of available vessels is increasing with the delivery of new vessels.

In Asia, just as in the Middle East, where activity is steady, the utilization rates of the existing fleets differ noticeably depending on the degree of innovation of the vessels and hence their efficiency in terms of user costs. This difference can also be evaluated in terms of daily rates, to Bourbon's benefit.

Finally, the determination of both nations and national oil companies sustains the dynamics of the markets. This is especially true of India and the Mediterranean, as well as Brazil and Mexico.

The sharp reduction in revenues in the Bulk Division in the first quarter of 2009 to $40.2m (a decline of 54.4% compared with the first quarter of 2008) reflects an activity slowdown (six full time equivalent vessels less) and the sharp drop in freight rates (-78%).

Indeed the Baltic Supramax Index (BSI) average for the first quarter of the year is $10,875/day compared with the first quarter of 2008, when it totaled an average of $50,265/day. Our long-term contracting policy has enabled us to limit the effect of unfavorable trends.

During the quarter, the Bulk Division took delivery of two Supramax vessels, which raises the fully owned fleet to seven units.

On March 24, the Luxembourg company Jaccar Holdings, rose above the 5%, 10%, 15% and 20% thresholds of the Bourbon's capital and voting rights following a transfer of ownership stakes. Jaccar Holdings is resuming the role of shareholder played by the firm Jaccar until now while following through smoothly with any commitments made by the latter company, i.e. a shareholder assisting with the growth and strategy decided on by the Bourbon Board of Directors.

In the bulk industry, the caution of the players is reflected by the stable forward freight rates that guarantee a return on the contracts made on the vessels. The cancellation or change in delivery schedule for vessels under construction, the importance of demolition for old vessels and the end of merchandise destocking may have a favorable effect on future rates.

In the light of the knowledge we have today, i.e. our industrial clients' need for transportation, and the percentage of our vessels out on charter to third parties, we do not believe , at the level of the market, that the positive contribution of the Bulk Division Activity is in doubt, even though it's results will be significantly reduced.