Bonheur ASA - Report first quarter 2006

Thursday, 04. May 2006 09:00

The Group accounts have been prepared according to the International
Financial Reporting Standards (IFRS). The interim report for the
first quarter 2006 has been prepared according to IAS 34, based upon
accounting standards, statements and interpretations valid at the
time of preparing the accounts.

The figures are expressed in NOK, unless otherwise indicated. The
figures for the first quarter of 2005 are given in parenthesis.


The operating result (EBIT) which in principle reflects the holding
company costs, was negative with 7.7 million (negative 5.7 million).
All important companies and investments have been consolidated as
associated companies.

Associated companies were consolidated with an aggregate result of
162.3 million (negative 113.1 million). Of this, First Olsen Ltd.
(FOL) contributed with a result of 47.2 million (negative 48.9
million) from its activities within tankers, floating production and
the Bulford Dolphin drilling rig. Fred. Olsen Energy ASA (FOE) was
consolidated with a result of 60.2 million (negative 21.8 million)
and Ganger Rolf ASA with 65.1 million (negative 46.7 million). The
cruise segment was consolidated with a result of 1.5 million (1.5
million), wind power with a negative result of 2.8 million (positive
14.7 million), and Comarit with a negative result of 6.4 million
(negative 8.6 million).

Net financial items were positive in the quarter with 0.7 million
(10.2 million). Forward exchange contracts and interest rate swaps
have been valued at fair value.

The consolidated result before tax was 155.3 million (negative 108.6
million), an improvement of 263.9 million as compared to the
corresponding quarter in 2005.

A report from the various business segments follows below. Bonheur
and Ganger Rolf have an ownership of 50% each in these operations
unless otherwise indicated.

The segment includes Energy services, Energy production and Tankers.

Energy services
Offshore drilling and ship repair and maintenance
FOE, owned with 29.52% each by Bonheur and Ganger Rolf, had an
operating result before depreciation (EBITDA) of 391.5 million (121.0
million) and a result after tax of 172.1 million (negative 98.0
million). An excerpt of FOE's report for the first quarter 2006
follows on page 4.

The Bulford Dolphin drilling rig, owned indirectly by First Olsen
Ltd., operated on contract for Equator Exploration Ltd. offshore
Nigeria. The rig is operating in a pool with four other drilling rigs
owned indirectly by Fred. Olsen Energy ASA.

Bulford Dolphin had operating revenues of USD 6.3 million (USD 1.4
million) from the rig pool, EBITDA was USD 5.1 million (USD 0.4
million) and the net result was USD 3.5 million (negative USD 1.3

Floating production
All five units within Fred. Olsen Production (FOP) were on contract
in the quarter. FPSO Knock Taggart and MOPU Borgen Dolphin both
operated for Addax offshore Nigeria. FPSO Petróleo Nautipa (50% owned
by FOP) continued their operation offshore Gabon on contract for
Vaalco. FSO Knock Nevis continued its contract for Maersk Oil in
Qatar. The storage vessel Knock Dee completed a contract for PetroSa
in South Africa on 17 February.

Conversion work on the VLCC Knock Adoon in preparation for a floating
production contract in Nigeria continued during the quarter. The
vessel will replace FPSO Knock Taggart on the Antan field with
expected start-up in July 2006. Both Knock Taggart and FSO Knock Dee
are marketed internationally towards new production and storage
projects. In addition, the two suezmax tankers Knock Allan and Knock
Stocks, are potential candidates for conversion to such projects.

FOP's operating revenue amounted to USD 15.8 million (USD 16.5
million). The operating result was USD 7.8 million (USD 9.0 million)
and the result before tax was USD 4.4 million (USD 1.5 million) after
depreciation amounting to USD 2.1 million (USD 7.0 million).

Energy production
Fred. Olsen Renewables (FOR) had operating revenue of 44.3 million
(36.9 million). The increase was mainly due to the fact that Rothes
windfarm was not in full production in the corresponding quarter of
2005, while Paul's Hill windfarm had some start-up production during
the quarter.

The operating result before depreciation (EBITDA) was 32.9 million
(27.1 million) and the result after depreciation (EBIT) amounted to
11.0 million (19.2 million). The result before tax was negative with
6.5 million (positive 29.3 million). The decrease was partly due to
increased depreciation and increased interest expenses related to new
windfarms. In addition, depreciation principles and interest
capitalization principles relating to the construction phase of
projects have been changed with effect from the 4th quarter 2005.

In total, FOR produced 80.6 GWh against 62.1 GWh in the corresponding
quarter of 2005. Actual wind conditions in Scotland were unusually
calm for this past winter season influencing the production from the
Crystal Rig and Rothes windfarms.

The Paul's Hill windfarm at 55.2 MW in Morayshire in Scotland came
into full production in April 2006. The extension of the windfarm by
9.2 MW to 64.4 MW has started, and will be finished in the third
quarter of 2006. It has been decided to increase Crystal Rig by 12.5
MW to 62.5 MW and the expansion is expected to be finalized during
the second quarter of 2007.

After the strong market in the fourth quarter of 2005, the tanker
market weakened considerably in 2006. There are still substantial
fluctuations in rates, partly influenced by the situation in Nigeria
and Iran. Increased imports to China during the first quarter hold
promise of a certain strengthening of the tanker market.

First Olsen Ltd. (FOL) owns and operates two Suezmax tankers in the
spot market. The average rate level achieved for the vessels was USD
35.100 per day (USD 56.200). Total freight revenues on a time charter
basis amounted to USD 6.3 million, compared to USD 28.5 million
during the same period of 2005. The decrease reflects the fact that
three Suezmax tankers were sold with delivery in the fourth quarter
of 2005. The operating result (EBITDA) was USD 3.7 million (USD 22.2
million) and the result before tax amounted to USD 10.1 million (USD
14.4 million).


Comarit in Morocco (25% owned by each of Bonheur and Ganger Rolf)
operated its three year round lines throughout the quarter, which is
low season. M/V Bismillah was sold in April 2006. Both M/V Boughaz
and M/V Berkane will undergo dockings during the second quarter of

Comarit with subsidiaries had operating revenues of 84.5 million
(86.7 million) and an operating result before depreciation (EBITDA)
which was negative with 15.7 million (negative 11.6 million). The
result after tax was negative with 25.5 million (negative 34.5
million). The results include a charge of 13 million related to
operations in 2005.

Other shipping activities include the ownership and operation of the
Ro-Ro vessel Norcliff, the ownership of Fred. Olsen Marine Services
AS and the ownership of 49.5% (combined indirect owner share for
Bonheur and Ganger Rolf) of Oceanlink Ltd.

The Ro-Ro vessel Norcliff started under a new time charter with Sea
Cargo by the turn of the years 2005/2006.

In December 2005, FOL acquired the ship management company Fred.
Olsen Marine Services AS which is responsible for the operation of
FOP's floating production units, the four cruise vessels operated by
Fred. Olsen Cruise Lines and the ferries owned and operated by

The Oceanlink Ltd. activity includes three reefers, one container
vessel and one anchor handling vessel. The three reefers are all
operating in the Seatrade pool in the Netherlands. The Santos
container vessel concluded a charter party in April and has been
fixed for a new period of two years to Japanese charterers. The
Statesman anchor handling vessel operated offshore Brazil, where it
has been operating since 2003.

During the first quarter, Oceanlink had an operating result (EBITDA)
of USD 1.5 million, while the result after tax amounted to USD 0.6


The cruise operation comprises the four vessels M/V Braemar, M/V
Black Watch, M/V Black Prince and M/V Boudicca. M/V Boudicca, which
was purchased in October 2005, was brought into service in February
after a major upgrading and installation of new main engines. The
opening cruise went to the Canary Islands, departing on 25 February.

Black Watch carried out a 69 days cruise around South America in the
quarter, while Black Prince carried out cruises to the Canary Islands
and the Caribbean. Braemar operated its winter programme with fly
cruises in the Caribbean.

Operating revenues in the cruise segment were GBP 18.4 million (GBP
14.1 million). The operating result (EBITDA) was GBP 2.0 million (GBP
3.1 million), while the result before tax was GBP 0.5 million (GBP
0.3 million). The quarter has been charged with costs related to the
start-up and introduction of the new vessel, M/V Boudicca.

Tusenfryd activities were, quite naturally, minimal during the

The 2006 season was started on 23 April by, among other things, the
opening of the most important single investment in the park's
history, the spectacular launch base "SpeedMonster", offering both
speed, loops and G-forces.


Bonheur and Ganger Rolf own a total of 32.6% of the AS Norges Handels
& Sjøfartstidende group (NHST), including Dagens Næringsliv,
Tradewinds, Upstream, Europower, Fiskaren, Nautisk Forlag, etc. NHST
had a result before tax of 12.9 million (8.4 million). The revenues
increased by 20% in the quarter to 206.2 million following an
increase in both advertising and circulation revenue.


Extract from the company's report for the 1 Quarter 2006

Kindly note that FOE shows 4Q 2005 in parenthesis, while Bonheur and
Ganger Rolf compare with corresponding quarter last year.

Operating revenues in the quarter were 935.9 million (897.9 million),
an increase of 38.0 million. Revenues within the offshore drilling
division increased by 26.1 million. The increase in revenues within
the offshore drilling division is mainly due to higher utilisation
and day rates. Further, due to operations not included in the
drilling contract for Bideford Dolphin the Company has received 14.9
million as extraordinary compensation from the operator. The increase
in revenues was partly offset by 14 days off hire for Byford Dolphin
and 7 days for Bulford Dolphin. Revenues within the engineering and
fabrication division increased by 129.2 million, of which 117.3
million were related to intercompany activities and eliminated in the
consolidated accounts.

Operating costs were 544.4 million (554.9 million), a decrease of
10.5 million. Operating costs within the offshore drilling division
decreased by 62.0 million. The decrease in operating costs within the
offshore drilling division is mainly due to a reduction of recharged
expenses and extraordinary cost items charged in the 4th quarter
2005. Operating costs within the engineering and fabrication division
increased by 166.4 million, of which 114.9 million were eliminated in
the consolidated accounts.

Operating profit before depreciation (EBITDA) was 391.5 million
(343.0 million).

Depreciation amounted to 123.7 million (155.5 million) due to the
amended depreciation schedule effective from 1st January 2006.

Operating profit after depreciation (EBIT) was 267.8 million (153.8

Net financial expenses were 90.7 million (86.0 million). The amount
includes borrowing costs of 28.0 million, previously capitalized,
following the refinancing of the USD 300 million credit facility and
the early redemption of the NOK 760 million bonds with a call option
premium of 34.5 million related to the early redemption. This was
partly offset by gains on financial instruments of 29.2 million.

Profit before tax was 177.1 million (67.8 million).

Net profit, after an estimated tax expense of 5.0 million, was 172.1
million (27.9 million).

On 26th March 2006 the company redeemed the "FOE 01" bonds 2004/09 of
NOK 760 million. A new 7 years credit facility of USD 600 million
replaced the credit facility of USD 300 million established in July
2004 and the "FOE 01" bonds 2004/09 of NOK 760 million.

As part of the restructuring of the Company's loan portfolio the
Company has decided to submit an offer to the holders of the
subordinated convertible bond loan FOE 02 4.5% 2004/09 to participate
in a private placement of up to 5.34 million shares at NOK 68, - per
share, equal to the conversion price, in exchange for a termination
of the conversion right. Except for the termination of the conversion
right, the loan will continue at unchanged terms until maturity date
on 30th March 2009. The initial loan amount was NOK 435 million and
outstanding amount at 31.3.2006 is approximately NOK 363 million. The
number of bondholders at 31.3.2006 was 50. Assuming all bonds are
converted into shares, the total number of shares of the Company will
increase by approximately 5.34 million shares.

Subject to acceptance of the offer the bondholders will release the
equity element from the convertible bonds and at the same time
maintain the right to receive the annual coupon of 4.5% to maturity.
Fred. Olsen Energy ASA will on its part secure a three years
subordinated loan at satisfactory terms.

A formal offer as outlined is subject to a resolution by the Annual
General Meeting of Fred. Olsen Energy ASA to be held on 29th May

The offshore drilling division reported revenues of 897.0 million
(870.9 million) and an EBITDA of 388.0 million (299.9 million).

Bideford Dolphin continued operations offshore Norway under a
contract with Norsk Hydro estimated to expire mid 2007.

Borgland Dolphin continued operations offshore Norway under the
current contract with Statoil, expiring end December 2006. In
September 2005 a new contract for the rig was secured with Statoil
ASA, on behalf of itself and the other licensees in the Tampen area
on the Norwegian continental shelf. The contract period is for three
years expiring 31.12.2009.

The deepwater drill ship Belford Dolphin continued operations under a
three-year drilling contract with ONGC in India, expiring early 2007.
In September 2005, a contract was secured with Anadarko Petroleum
Corporation for three years. The new contract will follow in direct
continuation from the present Belford Dolphin contract with ONGC.

Borgny Dolphin continued operations under a contract with Pemex in
Mexico, expiring early 2008.

Bulford Dolphin (owned by First Olsen Ltd. and being operated in a
pool with four of the Company's own units) commenced a drilling
programme for Equator Exploration Ltd. offshore West Africa in
November 2005. Mainly due to testing of discoveries the contract
period has been longer than originally estimated and is now expected
to expire in September 2007.

Byford Dolphin continued operations under its contract with CNR
International (U.K.) Limited. CNR has exercised the two options and
the contract is now estimated to expire in 2nd quarter 2007. An
agreement with CNR was entered into in November 2005 on a further
extension of the contract of 275 days in direct continuation from the
present contract.

Bredford Dolphin continued operations under a contract with Peak Well
Management Ltd. in the U.K. North Sea with an estimated duration to
3rd quarter 2006. In January 2006 a drilling contract for the rig was
entered into with Drilling Production Technology as, on behalf of
themselves and a consortium of licensees on the Norwegian continental
shelf. The duration of the contract is three years with estimated
commencement in second half 2006 following a compulsory class renewal
survey and upgrade for Norwegian requirements. Following completion
of the drilling programs in the UK the rig will move to Belfast where
preparation work will be carried out for the following 3 years
drilling contract in Norway.

Borgsten Dolphin continued operations under a contract with
ChevronTexaco North Sea Ltd. under a drilling programme in the U.K.
sector of the North Sea. In September 2005 a new contract for the rig
was secured with CNR International (U.K) Ltd for an approximate three
months drilling programme in the UK North Sea commencing in February
2006. In December 2005 contracts were entered into with Nexen
Petroleum UK Ltd. and Tullow Oil plc, respectively, for drilling
operations in the UK North Sea. The drilling programmes have an
estimated duration of 720 days of combined activity from May 2006 in
direct continuation from the unit's existing contract commitments.

Borgholm Dolphin continued operations under a contract with Shell
U.K. Ltd. for accommodation support in the UK sector of the North Sea
until January 2006.
During the quarter further contracts for accommodation support in the
UK were entered into with Talisman Energy (UK) Ltd. and Shell U.K Ltd
commencing in February 2006 following a short standby period. The
contracts will result in combined activity to end October 2006 with
options for a further two months extension thereafter.

In March a contract was entered into with Keppel FELS in Singapore
for the deepwater upgrade of the semi submersible drilling rig
Blackford Dolphin. The upgraded unit will be able to operate in up to
7000 ft. of water with a new high capacity drilling package and an
innovative deck layout. The yard work will be undertaken jointly by
Keppel FELS and Keppel Shipyard in Singapore and Keppel Verolme in
Rotterdam, the Netherlands. Contracts for construction of the
accommodation- and power modules have been awarded to the H&W yard.
The rig has arrived in Rotterdam and is scheduled for delivery in mid

A three years drilling contract for Blackford Dolphin was secured in
March with Reliance Industries Ltd with commencement after completion
of the ongoing deepwater upgrade and mobilization to India.

The engineering and fabrication division reported revenues of 157.6
million (28.4 million) and an EBITDA of 5.9 million (43.1 million,
including recalculation of pension liabilities of 40.1 million).
Revenues of 118.7 million and EBITDA of 2.4 million relate to
intercompany transactions.

The H&W yard continued its operations in engineering, ship repair and
shipbuilding. The yard has been carrying out work related to several
ship dockings. The utilisation of the yard as logistics and assembly
base for Barrow Windfarm Project continued during the quarter. The
yard has been awarded the contracts for construction of the
accommodation- and power modules on Blackford Dolphin and will
thereafter carry out work related to the class renewal survey of
Bredford Dolphin. The core workforce has been stable at 95 employees.


The Annual General Meeting will take place on 31 May at 14.00 hours
at the company's premises, Fred. Olsens gate 2, Oslo.

The full report including tables can be downloaded from the following
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