(Reuters) - French offshore oil and gas services company Bourbon said on Thursday that oil companies are restarting projects, which should help its business pick up after profits fell sharply in the first half.
Weak oil prices, which are more than 50 percent lower than 2014 highs, have prompted oil companies to cut back on spending and oil services companies have seen sharply declining profits.
However, Bourbon said new projects were going ahead, citing Qatar’s plan to raise liquefied natural gas (LNG) output by 30 percent and French oil major Total’s return to Iran.
“The fact that clients earn money, are finding room for maneuver, can invest with oil at $50 means that this situation will generate business for us,” Chief Executive Jacques de Chateauvieux said during a call with journalists on Thursday after the company released first-half results.
Adjusted core profit (EBITDA) for the first half fell 55.7 percent year-on-year to 59.6 million euros due to a continuing freeze in investment by oil companies.
The average utilization rate for the company’s vessels fell 13 percentage points in the first half to 53.8 percent.
The company said that it expects utilization rates to stabilize in the Subsea and Crew boats segments.
In an effort to adapt to the new market conditions, the company has introduced cost control measures and had 100 supply vessels stacked as of June 30, resulting in a reduction of 10 percent in direct and general costs.
“[Clients] have been very aggressive about looking for reductions in costs,” de Chateauvieux said.
Reporting by Alan Charlish; Editing by Susan Fenton