Shipbuilder Vard sinks deeper into red as Q3 losses widen to S$80m

SINGAPORE - Shipbuilder Vard Holdings sank deeper into the red as third-quarter losses widened to 486 million Norwegian kroner (S$80.2 million).

This is far worse than the net loss of 37 million kroner the firm logged in the same period a year ago.

Revenue for the three months to Sept 30 fell 19 per cent to 2.27 billion kroner, due to reduced activity at some of the European shipyards amid a prolonged industry down-cycle, said Vard Holdings in a filing to the Singapore Exchange on Wednesday (Nov 11).

For the nine months to Sept 30, the group posted 193 million kroner in net losses, a significant reversal from net profit of 169 million kroner previously. Revenue slipped 7 per cent to 7.8 billion kroner.

Vard Holdings noted that restructuring costs of 36 million were recognised during the quarter, comprising termination benefits and statutory payments pertaining to temporary layoff at several of its yards.

Earnings per share came in at 0.41 kroner, up on the 0.03 kroner previously, while net asset value per share stood at 3.34 kroner as at Sept 30, lower than the 3.50 kroner as at 31 Dec last year.

"Vard continues to face the dual challenge of dealing with slowing activity at its European yards on the back of continued weakness in the offshore market, and operational issues at its Brazilian facilities," said the group, adding that it is reviewing its exposure to the Brazilian market.

"We will continue to pursue cost improvement initiatives and organisational changed to streamline our business, and make the company competitive to seize new business opportunities," said chief executive and executive director Roy Reite.

"Our recent efforts to broaden our vessel offerings have been encouraging, and we will accelerate these efforts in the coming months, also look at completely new business areas."

Vard Holdings shares were down two cents or 5.6 per cent as at 10.50am on Wednesday, after the results were released.