Ebola Affects Bourbon’s Operations as Company Reports Loss

The deadly Ebola outbreak in Nigeria is affecting Bourbon SA’s operations, the supplier of ships and crew to energy producers said after reporting that it swung to a loss in the first half partly on industry cost cutting.

“The mobility of our vessels coming from Nigeria has been restricted by some countries,” Bloomberg quoted the company’s Chief Executive Officer, Christian Lefevre, to have told reporters.

“Vessels coming from Nigeria can’t go directly to Cameroon or Ivory Coast”, he said.

While Bourbon has stopped sending vessels to Nigeria for maintenance, there “haven’t been any significant disruptions” to operations, he added.

The company’s Nigerian operations are centered around

the southern oil hub of Port Harcourt. The city recorded its first death from the outbreak on August 22.

Bourbon posted a first-half net loss of €4.8 million ($6.3 million), after a €14.4 million profit a year earlier, as oil companies cut costs, delayed projects and the ship-supply industry suffered from global overcapacity, the Paris-based company said in a statement. It fell 3.4 per cent to €20.96 in Paris.

“The offshore oil and gas business environment is getting tougher for contractors,” an analyst, Raymond James wrote in an e-mailed note to investors.

Bourbon produced an “uninspiring set of results,” the analyst who rated the company ‘Underperform’ wrote.

Its sales, which were up 8.9 percent in the period under review on a “constant” basis, are expected to be at the “lower end” of a full-year growth forecast of eight per cent and 10 percent, Lefevresaid.

“Offshore markets during the first half of 2014 were affected by a slowdown in activity, partly due to cost reductions by oil and gas companies and delays on some projects,” he said in the statement.

The company, which took delivery of 23 vessels in the half to bring its fleet to 500, has sold and leased back ships to reduce debt.

A plan to sell as much as 30 per cent of its supply-vessel fleet will continue through next year, Lefevre said.

The Ebola epidemic in West Africa that has sickened more than 3,000 people may infect 20,000 more and cost at least $490 million to curb, according to a World Health Organisation plan.

THISDAY had reported that the effect of the Ebola virus is gradually taking its toll on businesses in the country as hotel occupancy in Lagos has since dropped by an average of 50 per cent.

Managing Director/Chief Executive Officer, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane who confirmed this, also revealed that in the Ikoyi area of Lagos, total hotel occupancy is currently down from 65 per cent, to about 30 per cent.

Thisday