Vessel maker Vard shares plunges 11 per cent on flagging Brazil operations

Shares of shipbuilding company Vard - previously known as STX OSV - plunged 11.5 per cent as of 2.30pm on Monday, after the company said that its operations in Brazil are expected to "continue to affect group performance negatively".

In the announcement made on Sunday, the company said financial results for the period ending Jun 30 will be lower than the current consensus market estimates.

Margins have been impacted by further delays and cost overruns at the group's Niterói shipyard in Brazil, due to lower productivity than expected, additional costs for outsourcing of hull construction activities to subcontractors, and revisions to the estimates of start-up costs at the new shipyard, Vard Promar.

The company said it remains confident of the long-term potential of the Brazilian market, though the overall industrial context in Brazil remains challenging.