Bourbon 2008 & 4Q Revenue Report

"Bourbon's performance for the year 2008 reflects strong growth in the offshore activities, keeping pace with deliveries of new vessels, with the renewal of old contracts and the use of outside charters when requested by our customers," said Jacques de Chateauvieux, Bourbon Chairman and Chief Executive Officer. "In the Bulk Division, 2008 will remain a record-breaking year as Bourbon was affected by the sharp fall in rates at year-end only with a time lag."

Bourbon's 2008 annual revenues totaled $1,205m, up 21% (+28.5% at constant exchange rates). The activity of both Divisions is still affected by the dollar trend, which became favorable again starting in the 4th quarter.

In the 4th quarter of 2008, revenues rose by 30.3% (+23.5% at constant exchange rates). Bourbon now conducts 95% of its business abroad.

The Offshore portion is up and accounted for 81% of the group's revenues in the 4th quarter of 2008.

Revenues recorded by the Offshore Division for 2008 totaled $870m, an increase of 38.7% (+46.6% at constant exchange rates). The increase noted during the 4th quarter of the year (+62.7% and 57.0% at constant exchange rates) reflects the commissioning of new vessels during the quarter (7 supply vessels and 9 crew boats) and the full effect of the vessels previously delivered.

In 2008, the Marine Services Activity generated an increase in income of 29.7% to $698.6m euros. This Activity greatly benefited from the vessels delivered during the year (20 supply vessels and 40 crew boats) and from revaluations of old contracts that had expired and were renewed during 2008. In particular, BOURBON took delivery of 12 "Bourbon Liberty" vessels designed for the replacement market in continental offshore, which are highly prized by customers.

The Subsea Services Activity is undergoing strong growth, in keeping with the Horizon 2012 strategic plan. Revenues amounted to $171.5m for 2008, up 93.2% over 2007. With two new vessels delivered in 2008, growth was partly sustained by chartering, pending the next deliveries.

Geographically, the growth of the Offshore Division was very rapid in Asia and remained strong in Africa, where in 2008, Offshore recorded 67% of its revenues.

The increase in the activity of this Division in Africa was due to Bourbon's strong presence in two principal growth markets, Angola and Nigeria. Despite the problems related to operations in that area, particularly in terms of security in Nigeria, the activity of the international oil companies associated with local national companies continues to grow, with new deepwater offshore fields brought on stream, the exploration of new permits and investments aimed at keeping existing fields in production.

The strong growth in Asia zone continues both in Eastern Asia and in India, in a still favorable market which is now opening up to new generation vessels. As of year-end 2008, Bourbon was operating 16 supply vessels and 13 crewboats in Asia.

Growth was confirmed in Mexico with the arrival of new generation vessels, while the activity was steady in Brazil.

Lastly, in the Europe-Mediterranean-Middle East, Bourbon boosted its presence thanks to the commissioning of vessels delivered from the shipyards.

Revenues for the Bulk Division were stable at $304m, but the year 2008 can be broken down into two separate periods.

The first nine months reaped the benefits of an exceptionally high freight rate (an average of $52,090 per day) associated with a sustained demand for volume.

During the fourth quarter, the collapse in Baltic Supramax Index rates ($8,725 per day) were coupled with a decline in short-term volumes carried. Over the whole year, 14 million tons were transported by Bourbon compared with $16.2m in 2007.

With the Division's contracting policy, the impact of this decline was limited. In fact, over the last quarter of 2008, while the BSI (Baltic Supramax Index) fell by 81%, the Division's revenues fell by only 36% (in dollars).

In addition, the sale of Fructidor in July lowered the share of revenues coming from the owned vessels.

In the offshore market, the change in the per-barrel price of oil to around $45 could impact the overall level of business activity. However, the effect on Bourbon is expected to be limited. In fact, as Bourbon earns nearly 90% of its revenues from major national and international companies whose investment plans should remain strong, it will be only marginally affected by any investment reductions that might be decided by the other independent operators. In addition, Bourbon provides marine services operations for the most part during production or maintenance phases of existing offshore oil fields which are, by nature, less sensitive to trends in oil prices. Lastly, 80% of the existing fleet is already under contract for the year 2009. As scheduled in the Horizon 2012 plan the rhythm of new vessel deliveries will be accelerated with an expected 31 supply, 2 IMR and 44 crewboats in 2009.

The general context of the bulk market is of a decline in global trade volumes, a fall in the Baltic Supramax Index (BSI), and great uncertainty about customer demand and the soundness of the counter-parties to contracts.

As far as Bourbon is concerned, the substantial decline in market rates will impact revenues, but the Division's activity is not expected to suffer the full effect of the downturn in the market, due mainly to:
•    The increase in the directly owned fleet by taking delivery of vessels,
•    Earnings from logistics management services provided to customers over the long term, and
•    The income from the vessels chartered to third parties over long periods.