Bourbon set to axe two more Pipavav panamaxes.
France"s Bourbon offshore services group is preparing to cancel two more of the four panamax vessels it has ordered from India"s Pipavav Shipyard, writes Andrew Spurrier in Paris.
The group, which cancelled a first vessel in January after the yard got behind with the contract, said it was likely to cancel two more if the yard failed to deliver them before cancellation clauses came into effect later this year. For the moment, it is working on the hypothesis that the fourth vessel, on which the cancellation clause will not come into play until next year, will be delivered.
Bourbon chairman Jacques de Chateauvieux said the cancellations were not expected to have any particular repercussions for the group"s relations with Pipavav since the yard was a greenfield one, the development of which had got behind for reasons beyond the group"s control.
The four vessels were ordered for the group"s bulk shipping subsidiary Setaf Saget, which has already taken delivery of two 58,000 dwt supramax vessels this year and is due to receive four more before the end of the year.
The Pipavav orders were part of a programme of development of the group"s owned bulk fleet, which is expected to take it to a total of 18 vessels by next year. Last year, the group took delivery of three 53,000 dwt and three 58,000 dwt bulk carrier plus one cement carrier.
Last year, the group"s bulk shipping business saw its operating result plunge 74% to ?27.3m ($37.5m) on the back of a 49% fall in revenues to ?119.3m, mirroring the average 58% decline in the Baltic supramax index over the year.
The group said the increase in its owned fleet had nevertheless limited the fall in the profit margin of its bulk business, as the share of its bulk revenues from owned vessels increased from 30% to 48%.
Overall, group net income fell 31% to ?155.4m, while revenues rose 3% to ?960.5m as its main offshore business maintained strong increases in operating profit and revenues.
The group"s offshore operating result rose 39% to ?193.9m as revenues climbed 20.5% to ?809.9m.
Bourbon said offshore revenue growth had been organic, largely generated by the arrival of 71 newbuildings in the course of the year.
Mr de Chateauvieux said that Bourbon group"s net income level was ?satisfactory?, taking into account that 2008 results had been boosted by capital gains from ship sales and disposals of shareholdings.