French Beneteau highlights boat maker woes

By James Regan and Gilles Guillaume

PARIS, April 2 (Reuters) - French boatmaker Beneteau (CHBE.PA) is in talks with staff about the company's outlook amid a sharp downturn which is depressing orders across the industry.

A Beneteau spokeswoman confirmed on Thursday the company was assessing the outlook for next year with staff and worker representatives, after a newspaper report that the company would cut hundreds of jobs as the credit crunch squeezes demand.

The Beneteau comments came a day after a French court agreed to place fast cruiser and luxury yacht maker Couach (YACHT.PA) under creditor protection, while luxury yacht sellers Rodriguez (RDGP.PA) last week delayed an update on debt talks with banks.

Some say the industry needs mergers to survive.

"The crisis is worsening in the world of pleasure boats," said CM-CIC Securities analyst Francis Pretre. "The sector landscape will undeniably change in the coming months with the likely disappearance of some major players. The sector is bound to consolidate."

Le Figaro newspaper said Beneteau, builder of pleasure boats under its own name and the Jeanneau brand, plans to cut up to a fifth of its almost 4,000 shipyard employees following a 50 percent drop in its order book since January.

Boat companies are struggling as customers delay purchases, leaving them saddled with high operating costs and unsold yachts.

"When you buy a boat, it's to sail in the summer," Fortis Bank analyst Thomas Alzuyeta said, noting production starts in the previous year for delivery to dealers from February.

"Today, your stocks are often at their peak, you've already started to pay your suppliers but not yet sold the product. You thus also find yourself in a trough in terms of cash flow, which explains why quite a few yards find themselves insolvent," Alzuyeta added.

PLEASURE OR PAIN?

Beneteau predicted two months ago that the pleasure cruising market could drop by over 40 percent without any improvement in the spring. The company said it expected group sales to be down 30 to 40 percent in its fiscal year ending Aug. 31.

Rodriguez in February posted a 49 percent drop in fiscal first-quarter yacht sales but said it expected to pass the low point in its cash position, usually at the end of February, without selling assets.

Yacht companies saw their share prices plunge last year, with Rodiguez stock one of the worst performers on the French stock market, down almost 94 percent. Couach lost 80 percent and Beneteau fell 61 percent.

Rodriguez shares have more than doubled so far this year on hopes the company will secure a deal on its debt with its syndicate of banks. The company designs, markets and sells yachts but only manages the construction.