Shipbuilder Vard swings to $4.1m loss in Q1

A krill fishing vessel for Aker BioMarine.
A krill fishing vessel for Aker BioMarine.PHOTO: VARD HOLDINGS
Vard Holdings' global shipbuilding facilities include the Brattvaag yard (above) in Norway.
Vard Holdings' global shipbuilding facilities include the Brattvaag yard (above) in Norway.PHOTO: VARD HOLDINGS

SINGAPORE - Shipbuilder Vard Holdings reported on Friday (May 12) a first-quarter net loss of 25 million Norwegian kroner (S$4.1 million), reversing from a net profit of 37 million kroner in the year-ago period.

Revenue for the three months to end-March 2017 dropped 12 per cent to 1.78 billion kroner, due to reduced activity, especially at its Norwegian yards, as well as the cessation of operations in Vard Niteroi during the third quarter of 2016. Vard said the reduced activity was for both its own and subcontractor production.

Vard also recognised a restructuring cost of 6 million kroner during the quarter, related to termination benefits and statutory payments for temporary redundancies, mainly in Europe and Brazil.

For the quarter, Vard also saw a lower net foreign exchange gain of 14 million kroner compared to 68 million kroner for the same period last year.

Looking ahead, Vard said its order book value amounted to 12.98 billion kroner as at end-March 2017, up from 10.65 billion kroner at the end of 2016 and 8.58 billion kroner a year ago. It said it had 43 vessels on order, of which 36 will be of its own design.

Vard also said new project opportunities are expected to arise from diverse markets for specialised vessels in which it has established a foothold.

Said the company: "Demand from the exploration cruise vessel segment is still healthy, as demonstrated by a letter of intent for one such vessel entered into in the first quarter. With contracts recently entered into for a krill fishing vessel, a pelagic trawler and a live fish transportation vessel, Vard has broadened its offering and strengthened its position in the fisheries and aquaculture segment.

"In the meantime, while still too sporadic to constitute a trend, nascent interest for individual vessel types is noticeable in the offshore sector."

Vard added that the majority of offshore projects in its order book are nearing completion and there is a shift towards construction of cruise vessels and other specialised vessels in all stages of production.