Vard Holdings Q1 profit halves on lower revenue, higher costs

SINGAPORE - Offshore vessel builder Vard Holdings has posted a 51.1 per cent drop in its net profit for the first quarter over a year ago, as lower revenue and higher costs squeezed margins.

Net profit was 92 million Norwegian krone (S$19.2 million) in the first three months this year, from 188 million krone last year. Revenue slipped 2.7 per cent in the same period to 2.7 billion krone.

The group's operating margin slid to 4.6 per cent in the quarter from 10 per cent a year ago, it said.

Its EBITDA margin - earnings before interest, tax, depreciation and amortisation as a proportion of its revenue - dipped to 6.4 per cent from 11.1 per cent.

Earnings per share halved in the first quarter to 1.61 cents from 3.39 cents a year ago. Net asset value per share inched up to 67 cents as at March 31, from 65 cents as at December 31 last year.

The Singapore-listed company said its order book hit a five-year high of 21.8 billion krone in the first quarter, 41 per cent up from the year before. This was due to an exceptionally high order intake of 5.5 billion krone, for eight new vessels, in the quarter.

"Vard expects continued strong demand from the subsea support and construction vessel segment, despite concerns over rising production cost in the oil & gas industry," the company said in its financial statements on Tuesday.

"Order activity for full year 2014 is expected to be good, though order intake in the first quarter is considered to be exceptional."