Bonheur ASA - Report third quarter 2006

Wednesday, 01. November 2006 08:45

The Group accounts have been prepared according to the International
Financial Reporting Standards (IFRS). The interim report for the
third 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 corresponding period 2005 are given in parenthesis.


The operating result (EBIT), which in practice consists of the parent
company's costs, was negative in the quarter with 6.1 million
(negative 5.1 million). All important companies have as before been
consolidated as associated companies.

Associated companies were consolidated with a total quarterly result
of 340.0 million (201.2 million). Of this, Fred. Olsen Energy ASA
(FOE) contributed with 110.7 million (41.9 million) and First Olsen
Ltd. (FOL) with 64.2 million (27.9 million) from their activities
within tankers, floating production and the Bulford Dolphin drilling
rig. The cruise segment was consolidated with a result of 29.6
million (28.7 million), Comarit with 19.9 million (21.9 million) and
Tusenfryd with 9.7 million (10.5 million). Fred. Olsen Renewables
(FOR) was consolidated with a negative result of 9.0 million
(negative 2.3 million), while Ganger Rolf ASA was consolidated with
112.9 million (71.8 million).

As per the third quarter, associated companies were consolidated with
a total result of 705.1 million (181.0 million), an improvement of
524.1 million.

Net financial items in the quarter were 7.1 million (5.1 million), of
which 7.8 million was net unrealized and realized exchange gains in
connection with a First Olsen Ltd. dividend of USD 48,9 million
relating to 2005, provided for but not paid out.

As per the third quarter, net financial items amounted to negative
31.5 million (positive 23.8 million). Forward exchange contracts and
interest rate instruments have been valued at fair value as per 30
September 2006.

The quarterly after tax result was 339.4 million (215,8 million), an
improvement of 123.6 million. The result after tax for the first nine
months of the year was 667.0 million (321.2 million).

In the following, we are reporting on the various operational
segments of the Group. Bonheur and Ganger Rolf have an ownership
interest of 50% each in these operations, unless otherwise indicated.

The segment includes Energy services, Energy production and Tankers.

Energy services

Offshore drilling
FOE, which is owned 30.86% each by Bonheur and Ganger Rolf, achieved
a quarterly operating result before depreciation (EBITDA) of 519.0
million (305.9 million) and a result after tax of 347.4 million
(109.7 million).

The operating result as per the third quarter amounted to 1,366.2
million (577.6 million), while the result after tax amounted to 797.6
million (negative 43.6 million).

An excerpt of FOE's third quarter 2006 report follows on page6.

The Bulford Dolphin drilling rig, which is indirectly owned by FOL,
continued its contract with Equator Exploration Ltd. offshore
Nigeria. The rig operated in a rig pool with four other drilling rigs
owned indirectly by FOE.

Bulford Dolphin had operating revenue of USD 9.6 million (USD 2.9
million). EBITDA was USD 9.7 million (USD 1.5 million) and the result
before tax was USD 7.4 million (negative USD 0.1 million). The result
before tax as per the third quarter was USD 15.7 million, an
improvement of USD 16.9 million from the corresponding period in

Floating production
FPSO Knock Taggart and MOPU Borgen Dolphin both operated for Addax
Petroleum in Nigeria. In September, Borgen Dolphin was sold for USD
21 million with a book gain of USD 16.7 million. Fred. Olsen
Production (FOP) continues to operate the unit under a management
agreement with Addax Petroleum.

FPSO Petróleo Nautipa (50% owned by FOP) operated for Vaalco offshore
Gabon and FSO Knock Nevis continued on contract for Maersk Oil
offshore Qatar. FSO Knock Dee, which in February concluded an
assignment for Petro SA in South Africa, is undergoing maintenance at
Dubai Drydocks.

The conversion of FPSO Knock Adoon was completed during the quarter
and the vessel has now replaced FPSO Knock Taggart on the Antan field
offshore Nigeria under a contract covering at least eight years.
Knock Adoon took over this operation from Knock Taggart after a
successfully conducted replacement, which took place in September.

Both Knock Taggart and Knock Dee are being marketed internationally
towards production and storage projects. As previously reported, FOP
is in final negotiations for a West African contract for Knock
Taggart. The company is working on the possibility of converting the
two FOL owned Suezmax tankers Knock Allan and Knock Stocks for
employment in the FPSO/FSO market.

FOP's quarterly operating revenue amounted to USD 32.5 million (USD
17.0 million), including a sales gain of USD 16.7 million. EBITDA was
USD 23.8 million (USD 9.7 million), EBIT was USD 21.6 million (USD
4.5 million) and the result before tax (EBT) was USD 16.0 million
(USD 4.0 million).

As per the third quarter, the operating revenue amounted to USD 63.9
million (USD 50.2 million). EBITDA was USD 38.4 million (USD 28.4
million), EBIT USD 32.1 million (USD 11.1 million), while the result
before tax (EBT) amounted to USD 23.0 million (USD 9.4 million). The
improved result was due to the gain on the sale of MOPU Borgen

Energy production

FOR had quarterly operating revenue of 36.2 million (36.4 million)
and a total production of 58.0 GWh (49.6 GWh). The production in the
quarter was only marginally better than in the corresponding quarter
last year, in spite of increased capacity (Paul's Hill windfarm).
This was due to markedly less wind, both in the third quarter and so
far this year, as compared to 2005.

The quarterly operating result before depreciation (EBITDA) amounted
to 16.6 million (24.2 million), while the operating result after
depreciation (EBIT) was negative 9.2 million (positive 8.2 million).
The result before tax (EBT) was negative 13.3 million (negative 3.1
million). The result is marked by weak wind conditions, as well as
depreciation and interest expenses relating to the completion of
Paul's Hill.

The operating revenue as per the third quarter was 135.7 million
(101.9 million), EBITDA was 90.4 million (69.3 million), EBIT was
19.1 million (31.9 million), while the result before tax was negative
with 17.9 million (negative 6.6 million). As per the third quarter,
the production was 230.0 GWh, against 155.3 GWh last year.

All windfarms operated technically satisfactorily during the quarter.

By the end of the quarter, FOR had 166.2 MW in production, 12.5 MW
under construction, as well as permissions for about 200 MW where
construction had not been started.

The expansion of Paul's Hill by 9.2 MW to 64.4 MW was completed
during the quarter. Work on the expansion of Crystal Rig by 12.5 MW
to 62.5 MW has started and is expected to be completed in the second
quarter of 2007.

The preparations for the construction of Crystal Rig II (120-156 MW)
are under way, and it is expected that the plant will be ready in
2009/2010. The construction of Mid Hill (50 MW) still depends on
clarification regarding grid connection.


An upturn in the tanker market early in the quarter was soon replaced
by a clear downward trend throughout the period. By the beginning of
the fourth quarter, however, the market has again shown a stronger
trend and recent USA oil/inventory reports may indicate a stronger
market until year end.

The development of a two-tier market strengthened during the quarter
and the main part of single hull vessels is now positioned in the
market east of Suez. The result being that the rate level in this
market is clearly lower than in other markets. The market level on
eastern trades was about USD 30,000 per day according to the Clarkson
ship broking firm, while for instance the level on trades between
West Africa and the USA was just over USD 50,000 per day.

In the third quarter, FOL entered into an agreement to purchase the
tanker M/T Astro Canopus, a Suezmax tanker built in 1998, for USD
76.5 million. The vessel is expected to be delivered early in
November and will be named Knock Sheen. The vessel has been
contracted on a three years time charter at a atisfactorily rate.

The company has entered into an agreement with Bohai Shipbuilding in
China for the building of two Suezmax tankers for delivery in the
fourth quarter of 2009 and the first quarter of 2010. The contract
price is USD 73.7 million per vessel.

FOL has owned and operated two single hull Suezmax tankers in the
spot market during the quarter. In the corresponding period last
year, the operation comprised five Suezmax tankers. The quarterly
average earnings were USD 28,150 per day (USD 22,400), while the
corresponding figure for the first nine months of the year was USD
27,000 per day (USD 38,500). Knock Allan had two months off-hire in
the period due to regular classification work.

Freight revenue on a T/C basis was USD 3.3 million in the quarter
(USD 13.6 million), operating result before depreciation (EBITDA) was
USD 1.8 million (USD 8.9 million) and net result before tax USD 0.9
million (USD 3.8 million).

For the first nine months of the year, freight revenue amounted to
USD 12.9 million (USD 63.4 million), while EBITDA was USD 8.3 million
(USD 49.5 million) and the result before tax (EBT) USD 5.5 million
(USD 33.6 million).


Until August, Comarit in Morocco was owned with 25% each by Bonheur
and Ganger Rolf. In August, both companies purchased a further 2.5%,
so that they by the end of the quarter owned 27.5% each. During the
quarter, Comarit operated four conventional passenger ferries on its
three all-year lines. M/V Sara I is chartered in until November 2006
to serve the line Algeciras - Tanger. The vessel M/V Mistral was
chartered in for the period June - September to traffic the summer
line from Al-Hoceima (Morocco) to Almería (Spain). Both M/V Boughaz
and M/V Berkane underwent planned dockings during the first half year

Third quarter is high season and traffic volumes generally increased
on all lines. Competing high speed vessels continued to take traffic
from conventional tonnage on the line Tanger - Algeciras. The line
between Nador and Almería showed a continued positive development for
Comarit, whereas increased competition has produced a somewhat weaker
development for the line between Tanger and Sète.

Comarit with subsidiaries had operating revenue of 311.5 million (320
million) in the quarter and an operating result before depreciation
(EBITDA) of 153.1 million (138,5 million). The result before tax was
positive with 124.3 million (114,8 million).

As per the third quarter, the company had a result before tax of 49.0
million (41.5 million).

Other shipping activities
The Norcliff ro-ro vessel is on T/C to Sea Cargo until the turn of
the year 2006/2007. The vessel was sold during the quarter for about
EUR 9.8 million for delivery at the turn of the year.

Time charter revenue for the third quarter amounted to about USD 0.7
million (USD 0.8 million). EBITDA for other shipping activities was
USD 0.5 million (USD 0.5 million) and the net result USD 0.3 million
(USD 0.4 million).

The first nine months of the year showed revenue of USD 2.5 million
for Other shipping activities, and an operating result of USD 1.1
million (USD 0.8 million). The net result of the operations was USD
0.5 million (USD 0.4 million).

Oceanlink Ltd., owned 49.5% by FOL, operated three reefers, one
container vessel and two anchor handling vessels. Oceanlink has
entered into an agreement for the purchase of the two anchor handling
vessels Far Crusader and Far Centurion with delivery during the first
quarter of 2007 for a total purchase amount of USD 28.5 million. The
vessels will be syndicated in the limited partnership market and
hired by Oceanlink under a bareboat agreement.

In the third quarter, Oceanlink had an operating result (EBITDA) of
USD 1.4 million and a quarterly result of USD 0.2 million. For the
first nine months of the year, the operating result was USD 3.3
million and the net result amounted to USD 0.8 million.


The cruise activity comprises the four vessels M/V Braemar, M/V Black
Watch, M/V Black Prince and M/V Boudicca. In addition, Norwegian
Crown was taken over in September with a lease-back to the seller for
a period of 14 months. The vessel will be named M/V Balmoral.

The quarterly operating revenue amounted to GBP 29.8 million (GBP
20.6 million). The operating result (EBITDA) was GBP 10.9 million
(GBP 8.5 million), while the result before tax was GBP 4.7 million
(GBP 5.4 million). During the quarter, all vessels operated various
cruises out of the UK, with an emphasis on Scandinavia, the Baltic
countries and the Mediterranean and operations were satisfactorily
conducted. Compared to the corresponding quarter last year, the
result was marked by a negative result from the valuation of forward
interest rate agreements as well as by somewhat higher technical

As per the third quarter, the cruise segment had a positive result
before tax of GBP 6.5 million (GBP 2.1 million).


The Tusenfryd amusement park is owned with 25.0% each by Bonheur and
Ganger Rolf. By the end of September, 516,000 guests had visited the
park. This was roughly the same number of visitors as in the record
year 2001. Compared to the same time of the year in 2005, the
increase was 22%. The improvement was mainly due to the opening of
the spectacular roller coaster "SpeedMonster", which many have
characterized as the toughest roller coaster in the Nordic countries.
A special launching technology produces an acceleration from zero to
90 km/h in just two seconds.

The operating revenue for the 2006 season (by the end of the third
quarter) was 173.3 million (136.5 million). The net result by the end
of September was 40.4 million (35.4 million). Viewed in isolation,
the third quarter result was somewhat lower than in the corresponding
period of 2005, because of increased operating costs as well as
depreciation in connection with "SpeedMonster". A requirement for
maintenance costs related to the attraction "ThunderCoaster" (wood
construction) is expected for the fourth quarter 2006.

On an extraordinary general meeting in Tusenfryd in the third
quarter, it was resolved to pay an extraordinary dividend. The
Bonheur share of this payment amounts to 2.8 million. The amount will
be entered as income in the fourth quarter.


IT Fornebu
Ten years have passed since the formation of the vision company IT
Fornebu, and there is now great interest in the Fornebu area. IT
Fornebu Eiendom (owned with 6.3% each by Bonheur and Ganger Rolf) has
presently let out about 95% of the terminal building premises to
research as well as small and medium size companies primarily engaged
in the type of operations aimed at in the original vision. The other
buildings on the property are also almost fully let out.

IT Fornebu Eiendom has received approval for its further property
development plans. They comprise the construction of four wings added
to the existing terminal building, totalling 26,000 m2. The plans are
aimed at maximum flexibility and high utilization of the available
area. The preliminary hotel plans show an architecturally challenging
tower design of 22 floors, which could become a landmark for the
whole Fornebu area.

Norges Handels og Sjøfartstidende
Bonheur and Ganger Rolf together own 32.6% of the AS Norges Handels
og Sjøfartstidende (NHST) group, including Dagens Næringsliv,
Tradewinds, Upstream, Europower, Fiskaren, Nautisk Forlag, etc. NHST
had a result before tax of 63.1 million (42.5 million) as per the
third quarter. All NHST newspapers show a positive circulation
development, except for the newspaper Fiskaren, which is slightly


Excerpts from the company's third quarter 2006 report. Kindly note
that FOE shows 2Q 2006 in parenthesis, while Bonheur and Ganger Rolf
compare with the corresponding quarter last year.

Operating revenues in the quarter were 1,119.1 million (1,028.0
million), an increase of 91.1 million compared with the previous
quarter. Revenues within the offshore drilling division increased by
97.4 million. The increase in revenues within the offshore drilling
division is due to higher dayrates and a settlement of 47 million
with Statoil regarding a previous drilling contract for Byford
Dolphin. The increase in revenues was partly offset by increased
off-hire on Bideford Dolphin due to the breakage of the flex-joint
and change of thrusters. Revenues within the engineering and
fabrication division were 127.9 million, of which 111.3 million were
related to inter-company activities and eliminated in the
consolidated accounts.

Operating costs were 600.1 million (572.3 million), an increase of
27.8 million compared with the 2nd quarter. Operating costs within
the offshore drilling division increased by 35.1 million. The
increase in operating costs within the offshore drilling division is
mainly due to higher repair and maintenance costs and higher crew
expenses. Operating costs within the engineering and fabrication
division were 116.8 million, of which 104.4 million were eliminated
in the consolidated accounts.

Operating profit before depreciation (EBITDA) was 519.0 million
(455.7 million).

Depreciation amounted to 121.7 million (113.8 million). The increase
is mainly due to new investments and higher USD/NOK rate.

Operating profit after depreciation (EBIT) was 397.3 million (341.9

Net financial expenses were 46.1 million (59.0 million).

Profit before tax was 351.2 million (282.9 million)

Net profit, including an estimated tax charge of 3.8 million (4.8
million), was 347.4 million (278.1 million).

Basic earnings per share were 5.5 (4.5). Earnings per share on a
fully diluted basis were 5.2 (4.2).

The Company has reached settlement with minority shareholders of the
previous Navis ASA regarding proceeding against the Company in
connection with the Company's mandatory bid for Navis ASA shares in
2000. As a final settlement against all claims related to the
acquisition of Navis ASA the Company has paid an amount of 8 million.

The offshore drilling division reported revenues of 1,102.5 million
(1,005.1 million) and an EBITDA of 514.8 million (452.5 million).

The engineering and fabrication division reported revenues of 127.9
million (140.5 million) and an EBITDA of 11.1 million (6.3 million).


Drilling Division

Bideford Dolphin continued operations under a drilling program
offshore Norway for Norsk Hydro. A three years drilling contract for
the rig has been entered into with Norsk Hydro Produksjon AS from
January 2008 to January 2011.

Borgland Dolphin continued operations offshore Norway under the
current contract with Statoil, expiring end December 2006. A new
three years contract for the rig has been entered into 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 drillship Belford Dolphin continued operations under a
three-year drilling contract with ONGC in India, expiring early 2007.
A new three years contract has been entered into with Anadarko
Petroleum Corporation. 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 operated in a pool
with four of the Company's own units) continued its operations for
Equator Exploration Ltd. offshore Nigeria. The contract is expected
to expire in early 2008.
Byford Dolphin continued operations under its contract with CNR
International (U.K.) Limited. The current term contract is estimated
to expire in mid 2007. An agreement has been entered into with CNR
for an extension of the contract for 275 days thereafter.

Bredford Dolphin continued operations under a contract with Peak Well
Management Ltd. in the U.K. North Sea. In January 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 February 2007. The unit will go
through a compulsory class renewal survey and upgrade for Norwegian
requirements at Remontowa S.A. in Gdansk, Poland prior to
commencement of operations in Norway.

Borgsten Dolphin has been operating for Nexen Petroleum UK Ltd. under
a short term contract, which will be followed by a 21 months term
contract with Tullow Oil plc. commencing in late October 2006.

Borgholm Dolphin continued operations under a contract with Shell
U.K. Ltd. in the UK sector of the North Sea. The contract expires in
November 2006. In September 2006, a five months contract was entered
into for accommodation work in UK sector commencing early January

The upgrade of Blackford Dolphin to a deepwater drilling unit capable
of operating in up to 7000 ft. of water depth continued at the Keppel
Verolme yard in Rotterdam. A three years drilling contract has been
secured with Reliance Industries Ltd. with estimated commencement
late in the 4th quarter 2007 following completion of the ongoing
deepwater upgrade, commissioning and mobilization to India. As
previously reported, due to the tight market situation for equipment
and personnel, costs are expected to continue to increase. This will
also have an impact on the Company's upgrade projects.

Engineering and Fabrication

The H&W yard continued its operations in engineering, ship repair and
shipbuilding. The yard was awarded the contracts for construction of
the accommodation- and power modules on Blackford Dolphin. The
accommodation module was completed and delivered from the yard in
October. The power module is scheduled to be completed in the 4th
quarter 2006.


After the end of the quarter, the company was informed that the Oslo
Assessment Board (Ligningsnemda) had made a decision which in
practice will imply that a subsidiary will have added an ammended
income of about 135 million for the tax year 2000. The effect of
this, including related tax penalties, may involve taxes payable in
the order of 45 million. The company is considering its further
handling of this issue.

As announced in a press release on 4 October 2006, Bonheur purchased
a further 584,000 shares in Ganger Rolf, thereby increasing its
ownership from 49.6% to 51.28%. This implies that the investment in
Ganger Rolf as from the fourth quarter 2006 will become a
consolidated subsidiary in the Bonheur accounts, instead of as an
associated company. For accounting purposes, this will represent a
business combination and the consolidated accounts will be based on
book values. Comparable figures will be prepared for previous

When the Ganger Rolf group is consolidated as a subsidiary of
Bonheur, it is expected that the parent company Ganger Rolf ASA will
have a minority share of 48.7% in Bonheur. Accordingly, the
subsidiary FOE (owned with 30.86% by each of the companies Bonheur
and Ganger Rolf) will have a minority share of 38.3%. All companies
within the most important remaining business areas, like floating
production, tankers, renewable energy and cruise, will be
consolidated 100% without minority interests. The NHST-group, Genomar
and Tusenfryd will be consolidated in the accounts as associated
companies with 31%, 32% and 49.9%, respectively of the after tax

At the same time, Ganger Rolf purchased 484,400 shares in Bonheur ASA
at a price of 205.- per share. After this purchase, Ganger Rolf owns
8,440,040 shares in Bonheur ASA, representing 20.7% of the share
capital. Ganger Rolf will as before consolidate its investment in
Bonheur ASA as an associated company.

The full report including tables can be downloaded from the following

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