Vard narrows losses in Q3, order intake strengthens

Vard is now focusing its Brazillian shipbuilding activities at the Promar yard.
Vard is now focusing its Brazillian shipbuilding activities at the Promar yard. PHOTO: VARD

SINGAPORE - Shipbuilder Vard Holdings has posted a net loss of 80 million Norwegian kroner (S$13.5 million) in the third quarter, narrowing from a loss of 486 million kroner in the same period last year amid restructuring efforts.

Revenue in the three months ended Sept 30 fell 34 per cent to 1.5 billion kroner, owing mainly to reduced activity at the European yards and the closure of the Niterói yard in Brazil during the third quarter, Vard said in a filing early on Friday morning (Nov 11).

Vard is now focusing its Brazillian shipbuilding activities at the Promar yard, where it raised its ownership stake to 95.15 per cent in August.

Meanwhile, Vard secured seven new contracts in the third quarter. These include two luxury cruise vessels for Hapag-Lloyd Cruises, an order for two module carrier vessels related to an earlier project for Topaz Energy and Marine, as well as a new win from Kazmortransflot, Kazakhstan's National Maritime Carrier, for the design and construction of three more module carrier vessels.

As a result, Vard's third quarter new order intake amounted to 3.3 billion kroner, bringing the total order size to 10.2 billion kroner for the first nine months of the year. This exceeds total new order intakes for each of the prior two financial years.

With the completion of large offshore subsea construction vessel projects in Norway, Vard said it has now reduced its exposure to the offshore oil and gas market, where it sees "no significant rebound in demand expected in the near term".

A restructuring cost of 27 million kroner was recognised in the quarter, relating to termination benefits and statutory payments for temporary redundancies, and are mainly due to the closure of the Niterói shipyard.

Third quarter loss per share was 1.19 Singapore cents, up from a loss per share of 6.86 Singapore cents a year ago.

Net asset value per share was 36 Singapore cent as at Sept 30, down from 52 Singapore cent as at Dec 31 last year.

Said chief executive Roy Reite: "We are heartened that since the launch of our diversification plans at the start of 2016, we have made promising headway in several areas.

"As we build relationships with new clients and adapt to demands in new markets, we continue to focus on new business development to keep activities at our yards stable and maintain Vard's position in a challenging phase for the industry."