Vard narrows losses in Q3 amid rising order intakes

Vard's shipbuilding facilities around the world include the Brattvaag yard (above) in Norway. In the third quarter, it landed seven new contracts, for luxury cruise vessels as well as module carrier vessels.
Vard's shipbuilding facilities around the world include the Brattvaag yard (above) in Norway. In the third quarter, it landed seven new contracts, for luxury cruise vessels as well as module carrier vessels. PHOTO: VARD HOLDINGS

Vard Holdings has posted a net loss of 80 million Norwegian kroner (S$13.5 million) for the third quarter, smaller than the loss of 486 million kroner seen for the same period last year amid restructuring efforts.

Revenue for the three months to Sept 30 fell 34 per cent to 1.5 billion kroner, largely because of reduced activity at the European yards and the closure of the Niteroi yard in Brazil in the third quarter.

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

The firm secured seven new contracts in the third quarter. These include two luxury cruise vessels for Hapag-Lloyd Cruises and an order for two module carrier vessels related to an earlier project for Topaz Energy and Marine. A new order from Kazmortransflot, Kazakhstan's national maritime carrier, covers the design and construction of three more module carrier vessels.

As a result, new order intakes for the quarter came to 3.3 billion kroner, taking the figure for the first nine months of the year to 10.2 billion kroner. That exceeds total new order intakes for each of the two previous financial years.

  • AT A GLANCE

  • REVENUE:

    1.5 billion Norwegian kroner (-34%)

    NET LOSS:

    80 million kroner (net loss of 486 million kroner in Q3 2015)

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

For the quarter, it recognised 27 million kroner in restructuring costs, relating to termination benefits and statutory payments for temporary redundancies, due mainly to the Niteroi shipyard closure.

Earnings before interest, taxes, debt and amortisation (Ebitda) before restructuring costs rose to 33 million kroner for the quarter, against a negative 467 million kroner for the same period a year ago.

Third-quarter loss per share was 1.19 Singapore cents, against a loss per share of 6.86 Singapore cents a year earlier. Net asset value per share was 36 Singapore cents as at Sept 30, down from 52 Singapore cents as at Dec 31 last year.

Total current liabilities fell to 13.1 billion kroner as at Sept 30, from 16.5 billion kroner as at Dec 31. Cash and cash equivalents came to 525 million kroner as at Sept 30.

Chief executive Roy Reite said in a statement yesterday: "Since launching our diversification plans at the start of 2016, we have made promising headway in several areas."

The stock closed at 23 cents, down five cents, after earnings were posted yesterday.

A version of this article appeared in the print edition of The Straits Times on November 12, 2016, with the headline 'Vard narrows losses in Q3 amid rising order intakes'. Print Edition | Subscribe